Blockchain, Crypto & Smart Contracts: What they are & what they mean for IP

© 2018 Tonya M. Evans

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Recently, I delivered two presentations in Bangkok, Thailand about the intellectual property implications of blockchain technology. The first was an internal preso for the prominent Southeast Asian law firm of Tilleke & Gibbins, and the second was for the Licensing Executives Society-Thailand Conference.

In each preso, I engaged attendees (live and via video conference) in a macro-level exploration of blockchain technology, cryptocurrencies, and smart contracts to clarify what this relatively new disruptive, empowering ecosystem is, what it means for our collective future as attorneys, corporate leaders, startup founders and entrepreneurs, and its implications in intellectual property law.

Recently, Darts-IP.com published an article I wrote titled IP + Blockchain: A Primer based on some of the information I shared in Bangkok.

I could spend all day every day falling down the proverbial rabbit hole of information about blockchain. There is literally breaking blockchain and cryptocurrency news every minute, if Coindesk’s website and twitter feed are any indication. Each bit and byte of information leads to more information (and misinformation), FUD (fear, uncertainty, doubt), FOMO (fear of missing out), and speculation about all of the potential pitfalls and opportunities in this new technology frontier. So it’s difficult for most people to figure out where to begin. If this describes you, you’re not alone and you’ve come to the right place! Read on.

You probably have questions (or you wouldn’t be reading this post). Lots of them. The first may very well be where to begin to get a handle on the power and promise of blockchain. Everyone should have some baseline understanding. But lawyers, in particular, must achieve basic technological competence in this space to be well positioned to help clients solve problems. Given my background and expertise, I am particularly interested in the intellectual property issues triggered by blockchain’s rise in mainstream adoption as research & development use cases transition into full implementation and refinement.

In future posts, I will share trends and current events in the blockchain ecosystem that raise copyright, patent, and trademark issues. Follow me on Twitter @IPProfEvans for breaking IP-related blockchain and crypto news. Below are some blockchain basics that I cover more substantively in IP + Blockchain: A Primer and some additional resources about blockchain, crypto, and smart contracts.

So … what is Blockchain? [Updated excerpt from IP + Blockchain: A Primer

A blockchain (yes, there is more than one) is an immutable, decentralized database, referred to as distributed ledger technology (or DLT). Blockchain is software. But it offers a new data structure, a new way of storing encrypted information on a computer and synchronizing that data across multiple computers. Samson Williams of Axes and Eggs (crypto mining & consultancy) described the concept of DLT in a masterfully simple way on a recent ep of the “Get Found, Get Funded” podcast [around the 10:30 mark]. He explains that DLT basically functions like a group text. Each text is sent to the devices of every member of the group text. One member can delete the texts from her device but that does not remove the text or conversation from the other devices. DLT in a nutshell.

The data stored on a blockchain can relate to assets, transactions, contracts, and agreements entered into by users of the same blockchain. The ledger is relayed across hundreds, perhaps thousands of member computers (aka nodes) within an organization, a country, multiple countries or the entire world; each transaction is replicated in full on each member’s computer. Those member-computers confirm that transactions have taken place by consensus.

A blockchain is not located in one central place or controlled by one central entity or person. It can be public (open for all to view) or private (viewable only by a closed community).

Finally, blockchain is not a single technological solution and that’s part of its brilliance. The technology is highly versatile and can be customized to meet the needs of its adopters in most cases, assuming the user or industry can benefit from a decentralized, transparent ledger of transactions. But blockchain isn’t appropriate for every use, as Professors James Grimmelmann and Arvind Narayanan explain.

The first use case for blockchain technology was for cryptocurrency; Bitcoin, specifically. But there are a wealth of possible uses for blockchain technology, some with obvious applications like to store public records that everyone can access and no one can change or destroy (for land records, for example). In fact, blockchain tech will disrupt dozens of industries beyond banking and payments, including supply chain management, insurance, philanthropy, voting, government, healthcare, and energy to name just a few. [Read the full article …]

Resources:

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