Blockchain Smart Contracts Research Proposal

In both professional and personal aspects of human life, contracts are essential and considered vital for the smooth functioning of modern society. The nascent Blockchain technology field has introduced the concept of smart contracts to the world. These smart contracts have helped improve contracts’ role, functioning, and general organization in a revolutionary way hitherto unseen. Smart contracts are executable code foundations on the blockchain, which can facilitate and enforce agreements between two or more parties without using a trusted party [1]. This contrasts with traditional contracts where a trusted third party, usually a lawyer or judge, performs the facilitation and enforcement.

Although significant progress has been made on smart contracts, challenges and concerns inevitably arise. These have included privacy, legal, performance, and even security challenges [2]. While these are tied to the broader array of issues blockchain technology faces, it is crucial to understand them in the narrowed view of smart contracts, given the importance that contracts play in human interactions [6]. Consequently, a study of the blockchain, its link to smart contracts, and their accompanying challenges and overall concerns must be understood, as this research intends to achieve.

Contracts have been known to raise many legal questions throughout human history. It then follows that smart contracts should not be an exception. While smart contracts can perform the same role as a regular contract, software code, up to now, is not considered formal law in virtually all jurisdictions as the latter is [3]. This ambiguity of where smart contracts fall in a legal context is one of the main concerns hindering widespread adoption of its use. This research will attempt to find a clear distinction between smart contracts in a legal context.

Another challenge faced by blockchain-based smart contracts is their functioning and performance. It comes explicitly with amendments and termination of contracts. Being primarily digital in its inherent nature, drafting an amendment may not be a simple issue as putting pen to paper [4]. This inflexibility will also show when it comes to termination. Therefore, it is crucial to understand how smart contracts will function and perform compared to regular contracts.

Moreover, with recent headlines of cybersecurity breaches, a question on the security of smart contracts arises. The blockchain is touted as virtually impregnable when it comes to cyber-attacks. Knowing the nature of computer systems, such assertions are misleading, and the implication is that smart contracts stored in these systems could be prone to malicious attackers [5]. A study of the security of smart contracts is therefore essential

In summary, there is a need to understand the challenges and concerns faced by smart contracts and potential solutions given the numerous benefits to be gained should they function as envisioned. More specifically, the following research questions need to be addressed:

What are the legal boundaries and definitions surrounding smart contracts?

What would be the modalities and standard procedures involving smart contracts formulation, amendments, and execution?

What are the existing security measures in place involving smart contracts? What improvements can be made?

Potential challenges can be met when researching the issue at hand. Due to the relatively novel nature of both smart contracts and the blockchain, reference material to base the research on may be significantly reduced. Secondly, due to the inherent nature of the two, extensive testing of hypotheses may be challenging due to non-existent precedent. Lastly, verification of existing smart contract security procedures may prove difficult. Such information is closely guarded for fear of malicious actors taking advantage.

Extensive use of verifiable and highly credible sources to cater to the scarcity of reference material. Consulting experts on procedures and their experience may eliminate the challenge of a few existing links between smart contracts, blockchain technology, and security issues.

The research will be considered to have met the objectives if the following outcomes and deliverables are achieved:

Clear legal boundaries, definitions, and understanding are established, dealing with smart contracts in the context of existing law and establishing a framework for developing and executing smart contracts.