Executive summary: Given the fact that the number of virtual currency transactions, as well as digital wallet holders in Romania is constantly growing, we believe that a presentation of the topics related to virtual currency transactions, the blockchain technology and the conclusion of smart contracts would be helpful. Pavel, Mărgărit and Associates recommend contacting a specialized lawyer in cryptocurrency for legal representation in transactions involving virtual currency, as well as legal representation when concluding, executing or terminating smart contracts.
What is the blockchain technology?
Blockchain is a specific type of database that differs from the typical database by the way information is stored. This technology allows the transfer of cryptocurrency between two persons without the need for a third person to validate the transaction.
The blockchains store data in blocks that are then chained together, and consequently as additional data is added, this additional data is placed in a new block linked to the previous block.
This link between blocks makes blockchain technology a complex transaction system that gathers information through which data can be added and read, without being possible to be deleted or modified.
Additionally, by using a blockchain the possibility of copying or cloning digital assets is eliminated. Blockchain also ensures that each unit of value is transferred only once, with no risk of double costs spending.
Therefore, the main reason why blockchain could become a technology accepted in the future by the majority of the population is that transactions can be performed much faster and without the need for an intermediary.
What are cryptocurrencies?
The cryptocurrencies are a form of digital or virtual currency, used as a means of payment that is based on blockchain technology and through which cryptocurrencies become immune to counterfeiting and through which cryptocurrencies are protected by powerful encryption algorithms.
There are thousands of cryptocurrencies on the market today, with Bitcoin and Etherium in the top two.
The blocks created using the blockchain technology store the details of each cryptocurrency transaction, digital wallet holders being able to find out the number of cryptocurrencies owned at any time.
Among the advantages of the virtual currency is the fact that an intermediary is not necessary to transfer a value from one person to another, while the transfer of the virtual currency can be done quickly and anywhere in the world. Furthermore, the transaction history is saved in a decentralized register, without being able to be modified.
Cryptocurrencies were originally created with the aim of transforming them into a global means of payment that shall replace in the future each country’s banks and currencies.
However, nowadays most participants on the virtual currency market are often guided by their speculative instinct and their desire is to make profit. In this sense, it would be useful to contact a specialized lawyer in cryptocurrency, blockchain technology and smart contracts in order to carry out a legal research in regards to the legal provisions applicable in case of purchase and sale of virtual currencies and to the legal updates that could impact these transactions.
Thus, every case shall be carefully considered so that participants in the virtual currency market to trade virtual currencies in a secure manner, in accordance with legal provisions and with the observance of any potential penalties provided by law in such cases. In order to carry out these steps, Pavel, Mărgărit and Associates recommend contacting a specialized a lawyer in cryptocurrency, blockchain technology and smart contracts.
What are smart contracts?
The smart contracts represent a digital version of the traditional contracts that are stored in a particular type of network, namely blockchain.
This is an effective way to manage the assets without the need of any intermediaries.
Additionally, storing contracts on blockchain offers other important benefits, such as data security, fast execution of transactions, lack of fees charged for transactions and ultimately a significant reduction in errors regarding transactions that are often the result of the human factor.
In practice, smart contracts can be observed in the insurance sector (insurances concluded under smart contracts), the banking sector (bank loans) or in case of payment for products (for example, through courier companies).
Therefore, a lawyer specialized in cryptocurrency, blockchain technology and smart contracts can provide legal advice in regards to the legal aspects related to the conclusion, execution and termination of smart contracts, as well as ensuring compliance with legal provisions in such cases, as these types of contracts will include clauses that will have to be drafted in accordance with the law. It is imperative to observe the legal provisions of all transactions involving the use or trading of cryptocurrencies, including issues related to their taxation.
In order to carry out these steps, Pavel, Mărgărit and Associates Romanian Law Firm recommend contacting a lawyer specialized in cryptocurrency, blockchain technology and smart contracts that can provide legal advice in regards to the transactions involving virtual currency, to the conclusion, execution and termination of smart contracts, as well as the need to observe the applicable legal provisions in such cases.
Pavel, Margarit & Associates Romanian Law Firm is one of the top law firms in Romania, offering top legal advice. The Romanian law firm’s clients are foreign and top local companies and high worth individuals. In 2021, the success stories of the Romanian Law Firm have brought recognition from the most prestigious international guides and publications. The firm was ranked second place in Romania by the Legal 500 publication. The Romanian law firm is also recognized by IFLR 1000 Financial and Corporate Guide 2021. Pavel, Margarit & Associates Romanian Law Firm is also the only law firm in Romania recommended by the Global Law Experts Director in London in the Dispute Resolution area of Practice. All the relevant information regarding Pavel, Margarit & Associates Romanian Law Firm can be found on the website www.avocatpavel.ro.