Prospects of Blockchain in Contract and Property

• Authors: Benito Arruñada.
• BSE Working Paper: 110628 | February 20
• Keywords: transaction costs , enforcement , Property rights , registries , impersonal exchange , blockchain , distributed ledgers , smart contracts
• JEL codes: D23, K11, K12, L85, G38, H41, O17, P48
• transaction costs
• enforcement
• Property rights
• registries
• impersonal exchange
• blockchain
• distributed ledgers
• smart contracts

Recurrent difficulties are delaying what for the time being are still modest applications of blockchain. This paper identifies what value this new technology adds to the contractual and property processes, exploring its potential and analyzing the main difficulties it is facing. Paying particular attention to the distinction between contract (personal or in personam) rights and property (real or in rem) rights, it first examines the difficulties for trading contract rights through blockchain-based applications, mainly those to complete contracts ex ante without relying on third-party enforcers. Second, it explores the difficulties faced by blockchain to enable trade in property rights.