BLOCKCHAIN BASICS & LEGAL ISSUES March 17, 2018 2018 Computational Law & Blockchain Festival Houston, Texas Presented by Sharon Yin
WHAT IS A BLOCKCHAIN? 2. Ledger or Database that records information Information is packaged into “blocks” Blocks are linked to form a chain
CHARACTERISTICS OF A BLOCKCHAIN 3. Recorded Transparent Distributed Information stored is time stamped Anyone can see the ledger (public v. private) Ledger exists on multiple computers commonly referred to as nodes
BENEFITS OF A BLOCKCHAIN 4. Decentralized Peer to Peer (P2P) Network (Ex. Bittorrent) Nodes Any active electronic device (Ex. Computer, Mobile Phone) with internet access Validates new transactions based on the consensus protocol Immutable Once data has been written to a blockchain, it is very difficult to change
WHAT ARE CRYPTOCURRENCIES? 5. Cryptocurrencies are built on blockchain technology Digital assets Currencies such as Bitcoin and Litecoin Tokens that perform a particular function on a blockchain or provide access to a product (Ex. Ethereum, ERC-20s)
BLOCKCHAIN USE CASES 6. Bitcoin Smart Contracts Codes embedded onto a particular blockchain The smart contract contains all the rules, conditions and relevant information Ex. If X, then Y
BLOCKCHAIN USE CASES (CONT.) 7. Real Estate Healthcare Blockchain medical records enabling access for individuals, insurers, hospitals and healthcare providers Property Records
TOKENIZATION OF ASSETS 8. Authenticate any unique physical item and pairing it with a digital token Property Ownership Commodities
LEGAL ISSUES 9. In 2017, $4 billion invested in ICOs Offerings of new tokens or coins Initial Coin Offerings (ICOs) SEC Enforcement Actions Civil Class Action Lawsuits
LEGAL ISSUES (CONT.) 10. Cryptocurrencies Taxes (Trading, Mining, Forks, etc.) Fraud: Pump and Dumps Anti-Money Laundering Rules Hacks & Phishing Scams Ponzi & Pyramid Schemes with a crypto twist Securities Law
QUESTIONS 11. Questions?