Blockchain

I’ve presented a number of presentations on legal issues related to blockchain technology. After each presentation, I’m inevitably asked about some paper, person or resource I’ve referenced in the talk. In order to accommodate those requests and provide a single, easy to remember location (at least easy for me to remember) I’ve collected the most frequently referenced materials in one place. Here it is. If I’m missing something (or you just want to talk about blockchain) email me at lukegilman@gmail.com

Blockchain Cases:1

“Bitcoins allow vendors and customers to maintain their anonymity in the same way that cash does, by transferring Bitcoins between anonymous Bitcoin accounts, which do not contain any identifying information about the user of each account. The currency is “traceable” in that the transaction history of each individual Bitcoin is logged in what is called the blockchain. The blockchain prevents a person from spending the same Bitcoin twice, allowing Bitcoin to operate similarly to a traditional form of currency. Bitcoin is also a completely decentralized currency, operating free of nation states or central banks; anyone who downloads the Bitcoin software becomes part of the Bitcoin network. The blockchain is stored on that network, and the blockchain automatically “self-updates” when a Bitcoin transaction takes place.”

United States v. Ulbricht, 858 F. 3d 71, 83 n.3 (2nd Cir. 2017).

This problem is an unintended consequence of the top-down federal solution to the paperwork crisis that threatened Wall Street in the 1970s. Through the policy of share immobilization, Congress and the Securities and Exchange Commission addressed the crisis using the 1970s-era technologies of depository institutions, jumbo paper certificates, and a centralized ledger. It was an incomplete solution at the time. Since then, despite laudable and largely successful efforts by the incumbent intermediaries to keep the system working, the problems have grown. Distributed ledger technology offers a potential technological solution by maintaining multiple, current copies of a single and comprehensive stock ownership ledger. The State of Delaware has announced its support for distributed ledger initiatives. See Marco A. Santori, Governor Jack Markell Announces Delaware Blockchain Initiative, global Delaware Blog (June 10, 2016), http://global.blogs. delaware.gov/2016/06/10/delaware-to-create-distributed-ledger-based-share-ownership-structure-as-part-of-blockchain-initiative/.

In re Dole Food Company (Delaware Court of Chancery Feb. 15, 2017)

The Enduring Mystery of Satoshi Nakamoto

The final inventor of Bitcoin and blockchain is a yet unidentified individual named Satoshi Nakamoto. He first appeared on a crytography mailing list in the fall of 2008, dropped a 9-page paper outlining the concept of what would become Bitcoin (then described as a “peer-to-peer electronic cash system”) then released version 0.1 of the bitcoin software on Sourceforge in Jan. 9, 2009. He mined over a million bitcoin, which remain untouched, and promptly disappeared by December 2010. The mystery of Nakamoto’s identity and fate have been pursued by a number of excellent journalists, but the mystery endures.

A Selective (and Inevitably Outdated) Bibliography

  1. I have omitted a number of cases which merely reference blockchain in freezing cryptocurrency assets. See Securities and Exchange Commission v. PlexCorps (EDNY Dec. 14, 2017) (orders freezing assets by identifying Blockchain and determined that PlexCoin Tokens constituted investment contracts subject to the Securities Act and Exchange Act)