NEWSLETTER-2020-metin

233 ARBITRATION LAW Blockchain, Smart Contracts and Arbitration* Att. İdil Gencosmanoğlu Introduction The debate on the impact of technologies growing at a mind- blowing speed in the world of law is increasing day by day. Although blockchain technology has been one of the most talked about techno- logical advancements in recent years, the impact of it on legal pro- cesses continues to remain mysterious. Blockchain is defined as an “open, distributed ledger that can re- cord transactions between two parties efficiently and in a verifiable and permanent way” 1 . As the simplest description, the working principle of a blockchain is based on the concatenation of each transaction or movement as a “block” to the system, so that the platform constantly grows. With each new transaction, the entire system is updated and the transaction becomes visible to the concerned parties anywhere in the world. Key Features It is an open platform: In other words, as a rule, anyone can log into the system without any permission or approval. Each user is included in the system with their own unique identifier keys. It has a decentralized structure: This means that there is no higher authority in terms of implementation or control. The security of the system is ensured not by government regulation and authority, but by encryption methods using algorithms. Being decentralized also means that there is no need for an in- termediary party. For example, the transfer of money to another party * Article of May, 2020 1 Iansiti, Marco; Lakhani, Karim R., “The Truth About Blockchain.” Harvard Business Review, Harvard University. January, 2017.