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Synopsis
The blockchain technology, which was initially used in the development of cryptocurrencies (e.g. Bitcoin), shows prospect for wider application, for example in ledgers and registration systems for banks, land and shares. The blockchain is a distributed rather than a centralised ledger: it is not kept in a centralised server but is instead replicated across all computers (called nodes) running the same software. Blocks containing information of transactions are added to the chain upon validation by a majority of computers in the network in accordance with pre-agreed rules, written into code. These features make it extremely difficult for any individual to modify records on the blockchain, at least not by directly attacking the ledger as there is no centralised server and thus no single point of failure. There is also no simple means of reversing any transaction, should it be affected by fraud or mistake. This latter attribute, called immutability by advocates of the blockchain, is regarded as superior to traditional bank ledger systems. Whilst it is still unclear what immutability means, and it means different things to different segments of the blockchain community, it is necessary to address the question of whether immutability is a strength, a flaw or a double-edged sword. There are two distinct reasons to question the perception among the blockchain community that it is an unqualified advantage. First, to instill confidence in a broader community of users, the system must be capable of dealing with vitiated transactions, e.g. due to theft, fraud or mistake. Second, unless a highly complex blockchain is set up, more complex transactions, for example holding of the asset on trust or offering the asset as a security, are viable only if immutability is subject to interests that are not reflected in the blockchain (e.g. beneficial interests and equity of redemption). In approaching these issues, valuable lessons could be derived from the conception and evolution of the Torrens system of land titles registration, particularly on the topic of indefeasibility. At least four areas of development are worthy of mention. First, the choice between immediate and deferred indefeasibility has implication on whether a transferee who is a mere donee (as opposed to a purchaser) acquires indefeasible title. Second, the scope of the fraud exception, although included in the original statute, remains debatable owing to the malleable definition of fraud. Third, the list of indefeasibility exceptions has been subsequently extended both by statute and by the judicial recognition of personal equities. Underlying the incremental extension is the debate about the meaning of indefeasibility and what counts as a true exception. Fourth, despite its emphasis on registration of transactions, it has been recognised that the Torrens system does not preclude the existence of unregistered interests, which are to be protected mainly by the system of caveats. These developments illustrate the point that the principle of indefeasibility, and similarly in the case of blockchain immutability, is by no means a straightforward matter and that any viable system must provide a framework for mediating disputes, particularly between innocent parties, and to cater for the possibility of complex commercial transactions.
Speakers
Alvin See
Assistant Professor of Law
Singapore Management University
Chair
Warren Chik
Associate Professor of Law
Singapore Management University
Event Details
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Date:
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12 January 2018 (Friday)
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Time:
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12.30pm to 1.45pm
(Bento lunch will be served from 12pm onwards)
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Venue:
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Singapore Management University
School of Law
55 Armenian Street
Level 5, SOL-5.04-MR
Singapore 179943
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Registration
This is an invitation-only event. Admission is free and by registration only. Please register by Monday, 8 January 2018.
We look forward to seeing you at the event.
With warm wishes
School of Law
Singapore Management University
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