# Mihai Campan - Authenticity Without a Pen. Will Smart Contracts Ever Be Truly Binding

- Channel: [ETHCluj Meetup](https://streameth.org/ethcluj-meetup)
- Date: 2025-10-07
- Duration: 18:46
- Watch: https://streameth.org/watch/yt-2UY6s_GIroA
- YouTube: https://www.youtube.com/watch?v=2UY6s_GIroA

## Description

Explores the evolving relationship between traditional legal contracts and smart contracts built on blockchain technology.

Can lines of code replace ink and signatures? This talk examines the legal enforceability of smart contracts, their strengths and current limitations, and whether they can ever achieve the same level of legal binding power as their traditional counterparts. Will notaries ever be replaced by nodes?

## Transcript

Hello, I am Ihay Kanan and I'm a member of the Klujar Association and I uh come across contracts every day. Before I start pitching my presentation, I want you to know two things about me. The first one is that I that I'm the member of the Klushbar Association. I deal with simple or complicated contracts every day. And the second one is that since kindergarten, my nickname was Mike. So, I want to do this in a very in a more more informal way in order for the information to get to you uh easier. So, hello. I'm Mike and uh I'm here to present you about uh smart contracts and I want to make a confession. I don't know anything about smart contracts. Why do I say that? Because there are no rules in smart contracts. And you will see here that uh the things differ in many many ways from the legal contracts. So uh I think that everybody here is uh passionate about blockchain or works on blockchain. So I wanted to present you this in the most logical way possible in order for you to understand if there will ever be uh authenticity without a pen. So let's get started. First things first is what is a contract? So I prepared to you five types of contracts in order to understand this. And I will stop to the do the last two. The first one is the simple contracts. So it's what you do when you go and buy a bottle of water. What you do when you came here and bought the ticket for the conference. It's things that you do every day and you don't know that there are contracts, but I assure you that they are. Then we have the electronic contracts. Uh the electronic contracts are simple contracts but concluded in digital form. You know the ones that you eign uh at the end of the of the paper with your electronic signature. Then we have the contracts which require certain formalities and I refer here as contracts that need something need to be done in order for that contract to be concluded. And I refer here at uh lending money for instance in Romania and in the whole Europe lending money is not a contract that is concluded until you effectively lend that money. So that's the formality giving. Then we have the smart contracts the one with no rules based on blockchain where you um I think that you're familiar with them uh so I will not uh talk talk about them as u much and the authentic and notarial contracts. These two are the categories uh which interest us because all these three categories can be smart contracts. Disauthentic and notorial contracts cannot be smart contracts. And uh here is where the stakes are and I will get to that uh eventually. Uh I I want to to uh talk about now that the legal recognition between these two do these two type of contracts. The legal contracts are enforced under under laws. It's very simple. If you want for instance to sell something in Romania, you go to the civil code. Is there an artic there are 100 articles that says you what you have to do in order to sell something. If you want to uh conclude the smart contracts, the things are not as clear. Uh and I think that for smart contracts we have to see some different parts of the world and how they interpret this thing. For instance, the US legislation uh we have uh Arizona and Tennessee that since 2017 they started to um acknowledge blockchain sign signing and blockchain activities. Then we have Illinois which from 2020 recognized smart contracts in every area uh of the law. Then um I think that then we have a very important UK legislation. the UK law committee uh ruled uh like 3 months ago that in UK you don't need any much anymore legislation in order to conclude smart contracts. So the uh legislation in the United Kingdom allows smart contracts as it is now. Then uh we have the Asia Pacific zone where we have Singapore who allows smart contracts with a very good uh with a very good law. Then we have China who does not uh allow you as you probably know does not allow cryptocurrency but they allow blockchain. So a lot of their systems in China are based on blockchain. Uh and then we have Europe which is uh what which is our main topic where the things are not as well um ruled as in other as in other parts. uh we have these two I think that that you all know Mika and Eid2 which uh offer more security uh for our identity online for our uh cryptocurrency but we don't have anything to to rule the the smart contracts. So uh for for us to be possible to see how these things uh take place in Europe, we have to to go for forward and to understand the authenticity legal concept. What does ma what u makes a contract authentic? And the thing or the person that does a contract authentic is they're not a republic. So uh when you want to uh in Romania or or in any other civil uh law countries when you want to go and conclude a more important contract like selling real estate you have to go to the to the notary public who does three things. He identifies the the signaturary parties. you go with your ID and the not the the notary public says that the person in the ID who came here is the person in the contract. Then you go then uh the notary um analyze their ability to complete the act. And I refer here at their civil um at their civil capacity that there are they have the right age and stuff like that and some other stuff. For instance, if you want to sell something, you go to the public notary who says that you are the owner, you can sell that building. Uh, and these contracts are very important because they are mandatory in this field. So now I now knowing knowing what u and the the third thing is the constant to conclusion date act. The the notary public says that you were not threatened or you were not scared when concluding that act and you can do that. So knowing this and having this in mind, I I I want to make a comparison to see if this smart if the smart contracts uh can replace the authentic contracts and uh what is the stake for that? First of all, if this would happen, it will be more comfortable. Sure, because uh you can do that from your own living room online. You can you don't have to go to the notary public with a lot of uh paperwork. then uh it will be more secure and more transparent because it would it will be uh uploaded in the blockchain and it will be much more much more safe. Uh it will be uh an advantage for traceability because when you go to sell for instance real estate or land you have to go with all the paperwork from all the uh previous owners. If this was on blockchain, it would be there easily easily accessible. And the main goal and the main stake here is the financial benefits because uh you have to know that the nottorial nottorial fees are extremely high in Europe and I made I saw a study just in Romania. So in Romania per day are made 600 of these contracts. The fees approximately are 7 uh,500 lei. This means 4.5 million lei per day in notarial fees in Romania. This means 254 million euros per year in Romania in notarial fees. So if this smart contracts would be able to replace the authentic contracts, my friends, you have a€1 billion euros industry in four years. Now there are some limitations that's why we are not here that's why uh the the smart contracts are not used for this. So the first one are the terms of the authenticity the things that I told you that the public notary does it's to identify the parties on blockchain it will be much more difficult to identify the parties because there will be just some usernames there and you don't know the real identity. uh the ability to complete the act. You don't know for instance if the one who sells the the the building is not threatened with a gun or something to conclude that bit that that uh that business and the consent of the party it will be as well uh I don't know not that sure then there are some immutability risk there are bag there are bugs there are hackers or some unforeseen events that may occur occur and uh that's that makes makes this not not Sure. Then then we have the limited flexibility because once it's uploaded to the blockchain, you all know it's very hard to to be edited or to be undone or roughly impossible. Uh then we have some legal ambiguity because we don't know uh the legal jurisdiction. We don't know the ter what what law applied the terri the territoriality of that law because you have to know that in Romania the law says that if you sell real estate the applyable law is the law of where the building is. In other countries that says that the applying law is the law of the buyer of the law or the law of the seller and because this will will happen internationally probably it will be very very hard for this uh for this to uh be done. Uh another thing is that you have to know that in Romania citizens that are outside of the European Union or the European space of commerce are not allowed to buy land in our country. So it will be very hard to limit that. So there has to be done a lot of change in the law uh in order to to do this. Then it will be very hard to to conclude who is the beneficiary, who is the new owner of that thing that you bought because there are some cadastral rules you have to go and every property has to be owned by someone. It could not be owned by a username. It has to be owned by uh by a a real person. But these things made fresh new but I prepared some real world um examples that occur occur today. So in music and intellectual property we have uh a lot of uh platforms that use smart contracts. Then we have the finance where we have a lot of rules that allows us and decentralize the law now the uh loans and uh other stuff. Then we have in the supply chain we have in Australia a very big company uh called data hash that manages all the paperwork for all the supply chain through blockchain. Then we come to our examples real estate. We have a very interesting interesting startup in the United States called Propy who managed to sell as NFTs a property in Kiev. But you have to know that this was a hybrid thing. So the blockchain all the blockchain was used just to uh get the supply and demand and then all the other stuff was done in the traditional way with paperworks with notaries and some and stuff like that. But we have some all the the land records and real estate with u which are very interested in these two countries in the in the United Arab Emirates and in Georgia. Why? Because the United Arab Emirates uh and the all the Dubai land department is based on blockchain. So if you buy a uh if you buy a piece of land or if you buy a property or real estate in Dubai uh you go and file uh all your papers to be considered the the owner and the blockchain does all that. In Georgia as well uh they use blockchain to for all all of their cadestral uh agency uh all the and um for issuing the the certificates. So real estate is in somehow sold in uh based on blockchain. Now but this brings us to the whole point. Will there ever be authenticity without a pen? And now for to answer you this uh I have to give you a very lawyerish term very annoying term which is maybe I don't know there are a lot of a lot of steps going through that. There are a lot of things that the artificial intelligence and blockchain is doing now. Uh and all the signs are that we are going there. I told you that uh this is has a very very good uh and big financial um stake here because there are some the European parliament published that the nottorial taxes per day paid in Europe are roughly 1 billion euros. So it's huge and everybody wants to do this but uh we have to change a lot of laws to in order to do this and we have to make a very unitary uh space to do this because uh for because that's what the European Union wants to do but the question is if the European Union is big enough in order to do this because we don't we buy and sell land everywhere in the world we don't buy and sell land only in Europe and uh That's the key and that's the the question. So will there ever be authenticity without a ban? Yes, probably. Will there ever be um unitary law for the whole world to do this? I don't know. And that's the key. When uh all the international organism will align, yes, we will have authenticity without a pen. Thank you. >> Awesome. Thank you so much, Mih. Okay. Um, so question from me. I thought that stat around 243 million especially in Romania spent on notarial fees. That was really really interesting. Um, let's talk timelines here. So obviously like you know your answer was maybe and the probability of how far we'll we'll progress along this line. No one's really sure but um h how how close do you think we are to Romania being able to you know erode some of those fees and get across the smart contracts within these puresses? Romania Romania is not that close now, but the European Union is closed and the European if the European Union will rule this, Romania will be obliged to do this as well. Uh but uh and that that's the thing that the new the new guys that uh uh are in charge of the European Union, I thought I see that they are very inclined to blockchain and to artificial intelligence. And I think that maybe if uh we keep in mind that this has been done uh I think that we can talk about like three, four, maybe five years until we can do this because that's the future. Everybody sees it but we just need to put our law in order for this to to happen. So uh I cannot give you an honest answer but I don't see how in five years from now this would be not this will not happen. >> Okay, makes sense. And you mentioned a few different industries there um where smart contracts uh would be especially useful or perhaps even even kind of yeah closer to being used already. Um a few of them you mentioned music you real estate etc. Um let's say the regulatory landscape gets more progressive which you think are the first industries that will pounce upon something like this is it real estate or is it somewhere else? >> Real estate is the hardest. That's why I that's what I said it's the hardest industry to to do this. So yes, other industries will do this first, but I in my opinion the real estate is the highest stake because there are involved the the more the there are more money there. So uh no, I don't think that real estate will be the first one, but I will think that it will be the holy grail of smart contracts. >> Okay. And um are there any other questions from the crowd? Doesn't look like it. I've got one more from my side. Okay. Sorry. You do just one more. Um do you think that you know the development of you know the law on chain will be led more by the lawyers or more by the developers? I think that uh the law on chain will be it will be something that uh it has to be somewhere in the middle because uh the developers don't don't know the law as well as the lawyers and don't know how to to apply that law but the lawyers don't know how to program the code. So I think that has to be some sort of a m of a merger there in order to to provide what what the needs are. So I don't think that neither of them will be I will be will make this I think that the laws will be made by the organisms that make the laws now but the developers need to get in touch in order to put that uh to put that in mind because uh another very important thing that I saw is that nobody knows in the law industry or knows very little to how the blockchain and how artificial intelligence works and we can do a lot of things with them but we don't know that we can do them. So I think that uh these two worlds have to meet and have to get close to one another as soon as possible because uh we are at the start of this in the law system and uh I repeat the the stakes are very high for for the first ones to do that. >> Sure. So basically both worlds working hand in hand. >> Yes. That's that's that's the thing that I I think. >> Okay. Nice. Uh any final questions? Doesn't look like it. Well, thank you so much, Mihi. Fascinating topic presented so so well. Thank you very much. Cheers. >> Thank you very much.