Distributed ledger technology should be considered a critical technology, however so too should digital assets and smart legal contracts.
The Australian Government has nominated distributed ledger technology (DLT) as critical to the national interest. We agree.
However, it is vital to keep digital assets and smart legal contracts clearly in view.
Contracts are the underlying instrument defining and concretising business and private transactions: investments, loans, employment agreements, supply of goods, and delivery of services (to name a few). The secure, confidential, privacy-preserving, technically robust transaction of digital contracts, trusted by our country’s largest institutions and citizens alike, is best served (in the public interest) with sovereign critical infrastructure. This may take the form of a distributed ledger (but unlikely an open, permissionless blockchain) and may take other forms.
Contracts are the underlying instrument of the economy. When considering critical technologies in the national interest, more important than achieving consensus in a “trustless”, distributed manner – is the connection with digital contracting.
The architecture for collecting, storing, and managing data is crucial to the very idea of the “data economy”.
DLT is a form of information architecture that affords the ability not only to store but to transact and otherwise deal with (e.g., securitise or encumber) data in novel ways. Many of these are by now, well-known: “smart contracts”, “digital assets” including “cryptocurrencies”, and “decentralised autonomous organisations” are just three examples.
In our view, the most critical aspect of this technology—even more critical than achieving consensus in a “trustless”, distributed manner—is the connection with digital contracting. In our view, it is important to keep digital assets and smart legal contracts in scope—in their own right, as they may exist independently of DLT.