This is the second in a two-part series about blockchain basics.
Get ready for the revolution. If you think the internet changed the planet, blockchain is next up. Because it’s already been a part of the economy for years, you just didn’t know it. Believe it or not, Bitcoin was first used in a Domino’s pizza purchase in 2013.
Digital tokens like Bitcoins don’t need government involvement to guarantee the value, and because of this, it can function across international borders. So companies and individuals can send abroad without worrying about exchange rates or taxes.
Paper notes or gold are no longer necessary to represent tradeable units; instead, Bitcoin can be used: Bitcoin is cheaper, and it is also touted as a safer way to make online purchases.
Blockchain is already disrupting banking and payment industries, because you don’t need a third party to complete a financial transaction. You cut out the middleman and all their fees.
But cryptocurrency is really just the beginning.
Because the blockchain is really a new way to connect and transmit information.
There are a million possible applications for blockchain technology—like being able to send messages with complete privacy. It could be used as a new way to have decentralized cloud computing and storage.
Forget having a username and password. Blockchain technology can provide authentication of goods and prove who you are on the internet. Already you can even vote using blockchain technology.
Soon, it may be used to prove and trade ownership of financial assets, land, and any property that can be contained as data (such as music and film libraries).
Look for blockchain to disrupt the legal system like it has already done the banking and payment industries—from the way contracts are created and administered, to the very nature of contracts themselves.
For a deeper dive on blockchain technology, check out these:
If you’re already using Bitcoin, or wondering how it might affect business, contact us to discuss more of the legal and business implications of Bitcoin, now and tomorrow.
Scott is chair of the firm’s Securities practice. His practice is focused on advising a wide range of clients on SEC matters, securities transactions and corporate governance. He represents issuers, investment banks / financial intermediaries and investors in financing transactions, including public offerings and private placements of equity and debt securities.