As an attorney, I have the opportunity to speak with many blockchain clients as well as potential vendors and prospects. In recent years, blockchain technology has become increasingly important, with most people associating it only with Bitcoin or NFTs. In my article published in February, “Bitcoin and NFTs are just the beginning: why blockchain / DLT can do so much more!”, I argued that blockchain has much more to offer than just cryptocurrencies and digital collectibles
Today, the Ifo Institute issued a press release showing that blockchain technology is in use or planned for use by 6.9% of companies in Germany. According to a survey by the Ifo Institute, 12% of companies in the manufacturing sector use or plan to use blockchain technology, while in the chemical industry 14% of companies use it for their business processes. In the automotive industry, 13% of companies use blockchain and about one in five plan to do so. Among manufacturers of food, printed products, data processing equipment, electrical equipment, furniture, and in mechanical engineering, blockchain technology is used or planned to be used by at least one in ten companies. In contrast, the use of blockchain technology is significantly lower in the service, retail and construction sectors
This underscores that blockchain and distributed ledger technology (DLT) are more than smoking monkeys, ominous unregulated tokens, or the thousandth new currency from an unknown provider. Rather, blockchain technology is a groundbreaking step in digitization, comparable to the introduction of the personal computer. The blockchain enables data to be managed in a distributed infrastructure without a central authority, making transactions transparent, secure and trustworthy
It is important to recognize that we are at a pivotal point in technological development, and should not miss the opportunities that blockchain technology offers. However, it is equally important to pay attention to the problematic legal areas and to consult specialists for the technical and legal aspects. This is the only way to ensure that the implementation of blockchain technology runs smoothly and that its full potential is realized.
It should be noted that the legal challenges that arise in the context of blockchain applications often do not resemble typical NFT business cases. While NFTs often focus on copyright issues, other use cases of blockchain technology have a different focus. Data protection is becoming a key issue, especially with regard to the immutability of blockchain and compliance with the DSGVO (General Data Protection Regulation) in Europe. The question of how to protect and potentially correct or delete personal data when it is stored in a blockchain is a major challenge.
Another important area is compliance. Companies that use blockchain technology must ensure that they comply with applicable laws and regulations. This can be particularly complex when dealing with cross-border transactions where multiple legal systems must be considered. In addition, issues of liability and responsibility may also play a role in the context of smart contracts.
Overall, it is apparent that the legal issues surrounding blockchain technology are diverse and complex. It is crucial that companies that want to use or implement this technology comprehensively address the legal framework and, if necessary, make use of specialized advice.