Reading time: 3 minutes

Blockchain is the technology that underpins Bitcoin currency. Blockchain operates as an online ledger that allows every transaction to be tracked through peer-to-peer authentication. This means every single transaction is authenticated by the entire network and not by a centralised body (such as a bank or clearing house). As a “single shared source of truth“, the blockchain online ledger has the potential to transform the legal and financial markets.

About Blockchain Technology

In the blockchain, each ‘block’ is a recorded transaction timestamped with data. With Bitcoin, each block contains data about the recipient and sender’s details and the amount to be sent. For every single transaction that takes place in the blockchain, it is authenticated by the entire network through nodes. Each block in the blockchain authenticates the previous record to ensure rogue blocks cannot be added to the blockchain without first being validated by all previous blocks.

The ability to create a public ledger to track each transaction with minimal cost and without expensive settlement down will change the way the industry authenticates digital transactions. The public nature of the ledger means that it is open to all for participation, creating transparency and increasing efficiency.

The Impact of Blockchain

As it develops, the technology behind blockchain will be able to be implemented outside Bitcoin. Today, we are beginning to see blockchain being used to create and exchange binding “smart contracts”. Smart contracts are self-executing contracts that execute themselves once certain conditions are met. For example, if one party receives funds, it will automatically trigger an action to release funds to another.

The CEO of London’s fintech industry has said this could replace standard business documents to validated business agreements and relationships without turning to the legal industry. Not only would the settlement of transactions be more efficient, but also this platform could offer a low-cost solution by automating processes. By way of example, blockchain technology could be used to buy, sell and lease cars. Cars would receive a cryptographic signature when passing from each party. The cryptographic signature, in turn, would allow entry and access to the vehicle.

Moving Forward with Blockchain

Blockchain has the potential to revolutionise the finance sector by increasing efficiency and minimising fraud. By decentralising the market and minimising administrative tasks, the transparency of the blockchain should encourage stakeholders to look into how blockchain can help their industry. It is not a surprise that this technology is being cautiously reviewed by banks as traditional back-end services would no longer be needed.

Blockchain will fundamentally change the way we conduct transactions by removing the guard walls surrounding financial institutions. Over the next few years, we will begin to see reform surrounding decentralising the financial market as blockchain technology continues to be implemented by enterprises and financial institutions.


Innovation Nation: How to Make the Most of Australia’s Business Innovation and Investor Visas

Thursday 18 November | 11:00 - 11:45am

Want to expand your business into Australia? You need the right visa. Register for our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer