Technologically Driven Legal Framework of Blockchain and Cryptocurrencies

Technologically Driven Legal Framework of Blockchain and Cryptocurrencies

Ahmed Ashoor (University of New England, Australia) and Kamaljeet Sandhu (University of New England, Australia)
DOI: 10.4018/978-1-5225-9012-5.ch006

Abstract

Blockchain technology refers to a digital, immutable, distributed ledger that registers completed transactions in a well-ordered manner and near real time. Blockchain security creates a decentralized environment that bars any third-party organization from controlling the cryptographically validated transactions and data. Blockchain technology fosters business innovation by creating a peer-to-peer networking that prevents one central server from accessing as well as processing data belonging to all companies in the network. Cryptocurrency can be defined as a digital asset built to facilitate completed transactions using cryptography. It helps in providing protection to the completed transactions and controlling the creation of additional units of the currency. In the recent years, the application of blockchain technology has been associated with governance. Blockchain governance has been applied in different fields; for example, it can be used to create permanent laws that cannot be violated by any third party.
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Background

The existence of cryptocurrencies is based on blockchain technology. Blockchain technology refers to a distributed ledger that records completed transactions through digital means in a way that cannot be mutated (Shah & Jani, 2018). On the other hand, cryptocurrency is a digital asset designed for the purpose of acting as a medium of exchange by applying cryptography to not only provide protection to the completed transactions but also regulate the production of more cryptocurrency (Okhuese, 2017). The two technologies in conjunction can be implemented in different sectors such as the government, education, banking, healthcare, finance, and private sector. Governments benefit from the application of blockchain technology in numerous ways including in the issuance electronic identity cards (e-ID) to its citizens, developing electronic voting systems, managing land registers, recording and sharing medical information (Jun, 2018). These benefits are an evidence that there are numerous blockchain projects in many countries. As of 2017, majority of powerful actors on global scene have either planned, announced, or integrated the adoption of blockchain technology Figure 1.

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