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Florida Bill Would Make Blockchain Signatures Legally Valid

A measure filed in the Florida Legislature spells out that records or contracts secured through blockchain technology and blockchain signatures are both legally valid in the state

David Royse | LedeTree

The bill, filed last last week by Rep. James Grant, addresses a few different, minimally-related technology issues. But tucked in it are two elements that would address documents on blockchain technology in the state’s laws for the first time. A companion measure is sponsored in the Florida Senate by Sen. Jeff Brandes.

The bill would spell out that “a record or contract that is secured through blockchain technology is in an electronic form and is an electronic record.” Same for signatures that are secured through blockchain – they’d also be legally valid under Florida law.

Florida would join Arizona in making it clear that blockchain records are legal records. Similar bills were also filed earlier this month in Nebraska and Tennessee.

COINDESK: How does a blockchain-based smart contract work?

Also of interest in the bill is language that sets out a definition in Florida law for the first time for what blockchain technology is.

Rep. James Grant of Florida.
Rep. James Grant of Florida. Photo: Florida House

“‘Blockchain technology’ means distributed ledger technology that uses a distributed, decentralized, shared, and replicated ledger, which may be public or private, permissioned or permissionless, and driven by tokenized crypto-economics or tokenless,” the bill says. “The data on the ledger must be immutable, auditable, protected with cryptography, and provide an uncensored truth.”

The bill was referred to several committees.

Blockchain is best known as the peer-to-peer ledger that allows for the transfer of a cryptocurrency, like bitcoin, without the need for an intermediary – like a government – to guarantee the value of the currency. But the technology is being used more broadly. A blockchain is basically a ledger of transactions that is distributed across a broad network of computers – and is open for everyone to be able to see, so nobody can fraudulently change the ledger without everyone else knowing.

What is a Blockchain?

Backers of the similar measure in Arizona last year said that by passing a bill that laid out the validity and enforcability of blockchain digital signatures, Arizona sent a message to companies that develop applications based on blockchain that it’s safe to do business in a blockchain environment there.

But not everyone thinks the lawmakers trying to give blockchain tech the legitimacy of legality are helping, with some critics saying they don’t really fully understand blockchain.

“What a mess,” wrote Angela Walch, a law professor and a Research Fellow at the Centre for Blockchain Technologies at University College London, referring to the Arizona legislation earlier this year.

“Instead of celebrating, we should be lamenting this legislation as woefully uninformed and creating more problems than it solves,” she said.

Walch argued in a paper in the Journal of Internet Law that it’s not at all clear that blockchain records are completely unchangeable, for one.

“Simply stating in a statute that ‘data on the ledger is … immutable’ does not actually make data immutable,” she wrote.

The legislation in Arizona, which, like Florida, labeled data on a blockchain as “uncensored truth,” was over simplistic in that regard, too, Walch wrote, arguing that the data on the blockchain is limited by the quality (or the truth) of the data that was put into it in the first place.

Walch also noted that as an emerging technology, and even what really remains a nascent concept, the language around the subject is evolving quickly and it’s often not clear two people talking about blockchain mean the same thing in the words they use.

“The inconsistent, confusing, and sometimes misleading vocabulary around blockchain technology can make it difficult for regulators to get a handle on the ‘facts’ about the technology,” Walch wrote.

On Twitter last week, Walch summed up her concerns about lawmakers wading into the area.

“Defining the tech in an inaccurate way suggests that legislators understand it in an inaccurate way, and are therefore making flawed decisions about it,” she wrote on Twitter. “This is worrying, considering the uses people plan to make of the technology.”

Grant’s Bill Also Sets Out Details for Private Company to Provide Digital Driver Licenses

The provision is part of a larger technology bill that also requires Florida state officials to contract with a private entity “to serve as the authorized manufacturer of a digital proof of driver license, and procure any application programming interface necessary for enabling qualified and authorized private entities to securely consume a digital proof of driver license.”

Florida lawmakers have addressed cryptocurrencies before, in a law enforcement context. In a bill passed last year, lawmakers spelled out that virtual currencies were covered under the state’s money laundering laws.

About David Royse

David Royse
David Royse is the Editor-in-Chief of Ledetree.com. He has been a professional journalist for more than 20 years, including stints with The Associated Press and The News Service of Florida. He enjoys writing about health and medical science, and hopeful stories about scientific breakthroughs and new technology.

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