[This post has been authored by Sanah Javed, a fourth year student at the School of Law, Christ University.]
Blockchain technology refers to a distributed ledger which helps record the transactions taking place between multiple users over the internet. In a blockchain, there exist multiple blocks of information that rests with the computer base of each user (node), in order for a transaction to be complete. Each node must verify or authenticate the transaction thereby negating the need for a centralised trusted body such as a Bank. Blockchain technology possesses certain key functions such as ‘hash’ and ‘timestamping’ that make it unique. The Hash function helps in validating the integrity of a file. In case of any tampering or difference, the hash will produce an entirely different result hence detecting the tampering. Further, Timestamping provides a chronological record regarding the creation, access and modification of the transaction. These aspects make blockchain an irreversible and incorruptible repository of information, and hence extremely useful form of evidence.
Even though the technology gained popularity and prominence due to its use in cryptocurrency such as Bitcoin, it has multiple other functions and uses in varied fields such as Banking, Intellectual Property and Evidence law.
Acceptance as Evidence
In 2018, the Supreme Court of China formally recognised Blockchain evidence as admissible digital evidence in court proceedings. The intellectual property dispute was between ByteDance’s Douyin (popularly known as Tiktok) and tech giant Baidu, regarding the exclusive copyright of the former on its user’s video, that was uploaded by the latter on its platform without Tiktok’s permission. In order to back its claim Tiktok used the distributed ledger to prove the copying. The following presents a breakthrough in Blockchain and Evidence law.
Previously, the procedure to admit electronic evidence in China required that it be notarised to be admissible in court. Further, electronic evidence was necessarily required to be corroborated. It had to be proved either with the help of an expert’s certificate or with the help of the statement of the individual in possession of the said device producing the electronic evidence. This is similar to the procedure followed in India currently.
However, with Blockchain the need for corroboration is negated as the technology is successful in securing a chain of custody. As the nature of the technology itself makes it traceable, maintaining the integrity of the data and immutable to tampering it fits the requirement of the best evidence rule.
Jurisdictions around the world are open to the admissibility of electronic evidence. In case of Blockchain too certain countries have made progress. Vermont, Arizona, Delaware and Illinois in USA now accept Blockchain evidence. UK has shown susceptibility to accepting Blockchain as evidence, as have Italy and France. However, most countries still treat it as hearsay evidence.
Electronic evidence and the Hearsay Rule
Most jurisdictions including India require that electronic evidence be certified by an expert in the field. The following demonstrate that courts undermine the value of electronic evidence as compared to physical evidence. The Supreme Court has struggled with the reliability it attributes to electronic evidence. In Anwar PK v. PK Basheer and Ors. the court overruled the judgement given in State (NCT of Delhi) v. Navjot Sandhu, and held that electronic evidence was more susceptible to tampering and required the procedure laid down under S.65B, Indian Evidence Act, 1872 to be followed strictly. The Hearsay rule lays down that any evidence submitted, other than the oral evidence in the trial is inadmissible. This evidence that is offered by a third party out of trial is inadmissible as it cannot be verified or authenticated easily. Electronic evidence is treated as hearsay evidence by the Indian Evidence Act, 1872.
However, in the recent case of Shahfi Mohammad v. State of Himachal Pradesh, the Court observed that the provision of S.65B was merely procedural and not mandatory. An individual not in possession of the electronic device would not have to produce the certificate. The judgement demonstrates progression towards a system more susceptible towards Blockchain technology as admissible evidence without the support of any certification. However, it still lacks in clarity and uniformity in its approach to electronic evidence.
Can Blockchain be treated as electronic evidence?
The question that arises now relates to whether Blockchain technology is to be treated in the same manner as all other electronic evidence. The issue is a contentious one, as Blockchain does not require validation though an expert’s certification as is the case with electronic evidence.
Electronic evidence such as web pages, e-mails, digital photographs etc. may be susceptible to alteration or destruction and hence are treated as hearsay evidence. They require validation and corroboration. Hence, the procedure laid down under S. 65B(4) of the Indian Evidence Act, 1872 helps authenticate the electronic document with extrinsic evidence. The following is in accordance with the requirement of the hearsay rule.
Blockchain technology however, differs from other electronic evidence due to the fact that it cannot be tampered. The technology itself has probative value to the judicial system. In order to realise the true potential Blockchain technology purports to accord to the evidentiary system, it is proposed that the legislation specifically address the following and not bracket it with other forms of electronic evidence.
In U.S. v. Lizarraga-Tirado, the prosecution managed to prove the conviction of the defendant using a Google Earth image and a computer generated “thumbtack” to show that the defendant was present in the United States. The court accepted the thumbtack as admissible evidence and went on to rule that the following was not hearsay as the assertion was computer-generated evidence and incorruptible with no human interference. The Blockchain evidence is similar to the following; the record is without human interference and based on algorithms that are self-generated. The following develops the pathway towards rejecting Blockchain as merely hearsay evidence.
The Indian Evidence Act, 1872 must treat Blockchain as different from other electronic documents due to its distinctive nature. Further, the application and use of Blockchain technology in the functioning of the government itself provides validity to the system. With the growth and development of technology, the judiciary will soon be confronted with the question of admissibility of Blockchain as evidence, it is required that the legislature as well as the judiciary be equipped to address the following question in a manner that preserves the advantage that Blockchain can provide to the field of evidence.
[Addendum – Recommended Readings:
- Sylvia Polydor, Blockchain Evidence in court proceedings in China – A Comparative Study of Admissible Evidence in the Digital Age, Stanford Journal of Blockchain Law and Policy (2019).
- Primavera De Filippi and Aaron Wright, Blockchain and the Law: The Rule of Code, Harvard University Press, 2018.
- Marie Malaurie-Vignal, Blockchain, Intellectual Property and Fashion, Journal of Intellectual Property Law and Practice, Vol.15, Issue 2, February 2020, Pg 92-97.
- Angela Guo, Blockchain Receipts: Patentability and Admissibility in Court, 16, Chi.-Kent J. Intell. Prop. 440 (201).]