New Years Edition — Distributed Counsel 20

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It’s a new year, so I was going to put a quote at the top. I wanted to find some borrowed profundity from a better pen.  Of course, the goal of this device is to subdue at a certain level. You HODLed and lost ~80%? Here’s a quote to make you feel better.  

If there is a broader point and that quote somehow winds through a thicket of prose to get to the heart of it, well, that’s great.  I’m not saying the device is always an artifice. But most of the time it’s an artifice.

Sometimes the news is so crushing that the only way to prepare the unwitting is to offer a proverb about war from an ancient Chinese general.  Sun Tzu is easily the leader in the clubhouse for this sort of thing. So if you see a quote in italics at the top of the page, particularly one that includes words like “battlefield” or “history” or “resilient,” read what follows carefully.

I mention it because this sort of thing is regrettably starting to creep into crypto too.  The ecstasy that was Christmas 2017 has given way to the agony that is the realization that the Bitcoin market is a market like any other.  And that, yes, regulators will regulate; and that, yes, that ICO might not have been legal; and that, yes, the most popular Dapp on Ethereum is still crypto kitties; and that, no, Joe Lubin does not in fact have an infinite amount of cash.  This was never going to happen overnight. But the real question is what does Nietzsche think about it, right?

I’m not going to offer you some deep meditation on what it means as I squint a weathered gaze from a rostrum of deer antlers on a wintry peak.  First, I can’t. I’m not that smart, I don’t hunt, I live in Chicago and I still can’t really grow a beard. And second, it doesn’t help anyway.  Most of the time, it obfuscates more than it enlightens.

Instead, I’m gonna give you, ironically, Winkelvoss once more because he’s absolutely right:

This says it all.  If you believe in this market, then believe in it.  Don’t let the snark (or laughter) of others affect your judgment.  By all means, hear the counterarguments. Hear the reasoned critique. Process the cynicism. Hear the plaintive lamentations of your spouse, but in the final analysis be true to yourself if you can stomach it.  The cryptocurrency market is by definition a contrarian market. Bitcoin has survived (indeed many would argue thrived) another year. All is not lost, and it is still just so early.

I’m not saying hold Bitcoin–that’s not the point.  The point is that today’s depression is as irrational as last year’s exuberance.  

A Good List of Use Cases

We’ve got a new list of potential use cases and some of these sound genuinely exciting to me, in particular, smart contracts with embedded logic.  I can think of a lot of uses for this sort of thing, and I bet a good IP lawyer can come up with a lot more. I’m starting to make a study of Ricardian contracts and expect to post on the topic soon.

I have one prediction: a video game will incorporate a major cyrpto . . . oh wait, that already happened and unhappened

There is also this.  

Privacy and Blockchain: The Criticality of a Decentralized Verification Layer

If you are going to read one article this week, read this one from Guy Zyskind.  There is a lot to unpack here but overall this piece strikes the right balance between pragmatism and hope about the collision of these two sectors.  The most important quote for me is “[r]ather than rejecting the utility of blockchain [for privacy], we hoped that people would see blockchain for what it was good at being – a decentralized verification layer, not a complete platform.”  Zyskind also underscores the centrality of secure computing to painting a lasting verification layer over the internet. And this guy really understands secure computing (I think).  He and his company are ones to watch.


Did the Chinese figure out a way to turn copper into gold?  And if it is just “utility gold” is this a hard fork or a soft fork?  I’m voting soft fork because the “stuff” still has the same density as copper.  

There’s Byte Gold in ‘Em There Hills

Interesting article from the Economist, analogizing data to oil, and predicting a similar antitrust response from regulators.  As the saying goes, history doesn’t repeat, but it rhymes. Here is a fascinating article from 2002 explaining the utter pain (unless you were a lawyer) that was the IBM antitrust case.  It started in 1969, and apparently was still affecting the company in the 90s.

The point of the Economist piece is that data is different, and old metrics about market share don’t work in the data economy.  Whether the law can and will evolve to impose a different (more stringent) standard on data companies than, for example, an industrial conglomerate, is anyone’s guess.  But I can’t disagree with the premise. Data is the new oil, and there is black gold in them hills called Amazon, Microsoft, Google, and Facebook.

One data point in the Economist that caught my eye: by one estimate, a self-driving car may create 100 GB of data per second.  PER SECOND. Wow.

My Recent Article in Crytoslate

This one is about Morrison and its continued impact on the extraterritorial application of securities law.  Many thanks to Mitchell Moos and the fantastic team there.  Look for another on consortia and their unfurling, ever expanding problem set coming soon.

As always, thank you for reading.

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