Bitcoin, the world's biggest cryptocurrency, is getting bigger every day, with a single coin trading for $4801.30 yesterday morning—a bit higher than the six cents it went for in 2010, or the $250 a coin was worth in 2015. Blockchain, the technology underpinning the bitcoin, and hundreds of cryptocurrency challengers, has been getting even more attention, with enthusiasts claiming that this cutting-edge tech will transform the financial sector and even put lawyers out of a job.
So, uh, what a bitcoin? What does a blockchain do? And what do these mean for the law?
For lawyers and legal professionals who are interested in this topics, we’ve compiled four of our favorite resources from around the web, resources that help explain not just what these technologies do, but how they could impact both your clients and the legal industry. Whether you’re just starting to think about bitcoin and blockchain, or you’ve been following this since long before DogeCoin, these four are worth your attention.
The idea for bitcoin was first popularized in 2008, when the pseudonymous Satoshi Nakamoto proposed the concept in a white paper. Bitcoin would function as a peer-to-peer electronic cash system, Nakamoto explained, one that would use a distributed, virtually unalterable public record of transactions, allowing it to work without the involvement of a “trusted third party,” such as a bank. Now that idea is a reality, not only for bitcoin, but for the many similar cryptocurrencies that have followed, and improved upon, this approach.
This quick guide from the blog Bits on Blocks provides a quick overview of bitcoin, explaining both how bitcoin works and how it’s used, in a way that’s approachable for readers with minimal technical knowledge.
Blockchain is the technology that makes bitcoin and similar cryptocurrencies possible—and if you ask many technologists, its blockchain that is the most exciting advancement to emerge from the growth in cryptocurrencies. That’s because blockchain, a distributed ledger technology that allows for decentralized verification of transactions, has many applications well beyond cryptocurrencies. Applications like smart contracts, for example, or land registry systems in developing countries, or as a digital identity marker.
The Blockchain 101 series from the ABA’s Law Technology Today, linked above, lays out the potential legal implications of the technology and what lawyers need to understand about it. If you’re more interested in the technology itself, IBM has a great collection of resources that is worth visiting as well, despite the occasional marketing material that is mixed in. Coindesk, too, has a long list of blockchain guides.
Bitcoin, Blockchain, and the Law
This upcoming webinar, offered by yours truly, surveys bitcoin, blockchain, and their potential legal implications. The webinar, scheduled for October 26th, will look at the basics of blockchain and bitcoin technology, explain how these are impacting attorneys’ day-to-day practice, and examine developing regulatory frameworks. The program will feature Erica Wilson, of Vuono & Gray, a long time cryptocurrency enthusiast and one of the few people to have reported her bitcoin income to the IRS, and Stephen Middlebrook, an attorney with Womble Carlyle’s FinTech group and an adviser to the Uniform Law Commission’s drafting committee for the Uniform Regulation of Virtual Currency Businesses Act.
For legal professionals with an interest in the topic, this is a webinar you won’t want to miss. (If you can’t make it, feel free to sign up anyway. Registrants who can’t attend will be sent a recording of the webinar once it happens, so you won’t miss out despite scheduling conflicts.)
If you spend your day redlining contracts, you might be interested in how blockchain-based smart contracts will impact your career. Or, if you’re working in the financial services space, how bitcoin could change international financial transactions. But if you’re in discovery? Yes, you should pay attention, too.
As Eric Pesale explains here, cryptocurrencies pose unique problems for the discovery process. They are, he writes, “creating a new Wild West within today’s digital landscape, and it's one that lawyers and legislators must quickly come to terms with.”