Intro to Cryptocurrency and Blockchain

1. Introduction to Cryptocurrency and
Blockchain
By: Wes Williams, Esq.
Legal Notice/Disclaimer
The information and materials contained herein does not provide legal advice and does not
create an attorney-client relationship. If you need legal advice, please contact an attorney
directly.

2. About me
• 25 years of title insurance industry experience
• Attorney licensed in California

3. What are cryptocurrencies?
• Cryptocurrency is a digital asset, used as medium of exchange
which utilizes cryptography to control, verify and secure its
transfer.
• Bitcoin: Was the first decentralized (no third party intermediary)
digital currency, transferred peer-to-peer, utilizing cryptographic
signatures to secure each transaction. The transactions are
verified by public-network nodes and permanently recorded in a
public ledger.

4. What is Blockchain?
• The Blockchain is the system that was created to run the
Bitcoin application.
• It is an open source, decentralized ledger system which is
maintained across a network of computers called “nodes”.
• The ledger contains a continuous and immutable chain of
transactions which are grouped into blocks.

5. What is Blockchain Cont.
• Blocks can only be added to the chain if the nodes reach a consensus as to
the validity of the block to be added.
• To determine validity of a block, “miner” nodes compete to solve complex
math algorithms in order to validate the block (proof of work).
• The first miner to solve the algorithm and validate a transaction gets
rewarded in Bitcoin. Proof of work consensus by miner nodes eliminates
double spending problem.

6. What is a Blockchain Cont.
Public v. Private Blockchain
• The sole distinction between public and private blockchain is related to
who is allowed to participate in the network, execute
the consensus protocol and maintain the shared ledger.
• Public: Bitcoin and Ethereum are public blockchains
• Private: Banks and Corporations

8. Origins of Bitcoin/Blockchain
• In 2009 a white paper, drafted by an unknown person or group
of people using the name Satoshi Nakamoto laid the
groundwork for an open source, peer-to-peer, decentralized
money transfer system.
• The system envisioned by Satoshi allows people who have no
particular confidence in each other collaborate without having
to utilize a neutral central authority. Simply put, it is a machine
for creating trust.

9. New Terminology
• DAO: Decentralized/Distributed Autonomous
Organizations
• ICO: Initial Coin Offering
• Smart Contracts

10. Legal Issues that will Impact cryptocurrency
and Blockchain technology
• Jurisdiction
• Liability
• Intellectual Property
• Data Privacy
• DAOs
• Smart Contracts
• Property rights (Estate planning/Family Law)
• Discovery
• Ethics
• Can attorneys accept bitcoin as payment for services?
• NE-Yes so long as covert to USD

11. Legal issues cont.
• Regulatory Enforcement
• State:
• Licensing (NY Bitlicense); 5 other states proposing new cryptocurrency
regulation legislation (WA, IL, HI, CA and FL)
• Federal:
• Internal Revenue Service (Bitcoins are property-Capital Gains?)
• Securities and Exchange Commission (ICO tokens may be a security)
• Commodity Futures Trading Commission (Bitcoins are commodities)
• CFTC
• FinCEN
• BSA (AML Policy)

12. Legal Issues cont.
• Federal cont.:
• Consumer Protection and Safety and Soundness (OCC, States)
• Unfair and Deceptive Practices Act (FTC, CFPB, States)

13. Predictions for the future
LEGAL:
• Regulatory-wait and see; hopefully slow and methodical
• Civil disputes/disagreements: case by case, development of central
mediator/arbitrator
BUSINESS/ECONOMIC:
• Innovation driven by newly formed start-ups already working
within this sector.

14. Predictions for the future cont.
• Existing organizations:
• May adopt a hybrid model
• Private Blockchain
• May see more cooperation between competitors within specific industries
moving onto blockchain
• William Mougayar:
• He believes that organizations using blockchain will be creating and
offering their own currency (coin/token) with its own value within that
particular ecosystem that can be traded and exchanged for fiat currency.

15. Predictions for the future cont.
• William Mougayar cont.:
• Other prediction is that individuals participating within particular
blockchain ecosystem will generate income via “active” as well as
“passive” work.
• ACTIVE WORK:
• Work you do and have to concentrate on like you currently do
at your job
• PASSIVE WORK:
• Work that you do in your free time by posting content on
YouTube, engaging in social media, etc.

16. Conclusion
PH: (760) 546-8744
Email: weswilliamsesq@gmail.com
Legal Notice/Disclaimer
The information and materials contained herein does not provide legal
advice and does not create an attorney-client relationship. If you need legal
advice, please contact an attorney directly.