The Path to Cryptomania - Bitcoin and Beyond

These materials will review the factors leading up to Bitcoin and other follow on Crypto offerings. We consider whether the massive increase in crypto related investments could simply be (yet) another asset bubble. However, this might also be a fundamental technological transformation? Only time will tell. v1.02

Transcript

1. @ computational professor daniel martin katz danielmartinkatz.com BLOCKCHAIN, CRYPTOCURRENCY AND LAW professor nelson rosario THE PATH TO CRYPTOMANIA - BITCOIN AND BEYOND nelsonmrosario.com @ nelsonmrosario BLOCKCHAINLAWCLASS.COM
2. DANIEL MARTIN KATZ E D U | I L L I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW
3. BLOCKCHAINLAWCLASS.COM CRYPTOMANIA
4. https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html
5. EVERYONE WANTS TO TALK ABOUT THE PRICE ACTION IN CRYPTOCURRENCY BLOCKCHAINLAWCLASS.COM
6. BLOCKCHAINLAWCLASS.COM BITCOIN BUBBLE
7. BLOCKCHAINLAWCLASS.COM BITCOIN BUBBLE (2013)
8. BLOCKCHAINLAWCLASS.COM BITCOIN BUBBLE (2013) BITCOIN BUBBLE (2017- 2019)
9. BLOCKCHAINLAWCLASS.COM AND FROM THERE …
10. THE PRICE IS (ARGUABLY) THE LEAST INTERESTING THING ABOUT CRYPTOCURRENCY OKAY PERHAPS THE PRICE $$ IS A LITTLE BIT INTERESTING :) BLOCKCHAINLAWCLASS.COM
11. SO - WHAT IS INTERESTING ABOUT CRYPTOCURRENCY? BLOCKCHAINLAWCLASS.COM
12. TIME FOR A LITTLE HISTORY... BLOCKCHAINLAWCLASS.COM
13. THE 2008 BITCOIN WHITE PAPER https://bitcoin.org/bitcoin.pdf BLOCKCHAINLAWCLASS.COM
14. WHO IS SATOSHI NAKAMOTO ? BLOCKCHAINLAWCLASS.COM
15. WHO IS SATOSHI NAKAMOTO ? NOT ACTUALLY THE REAL SATOSHI NAKAMOTO HE JUST WANTED A ‘FREE LUNCH’ FROM A REPORTER BLOCKCHAINLAWCLASS.COM
16. ON OCTOBER 31 2008 AN ANONYMOUS INDIVIDUAL GOING BY THE NAME SATOSHI NAKAMOTO PUBLISHES A PAPER TO A CRYPTOGRAPHY MAILING LIST …. BLOCKCHAINLAWCLASS.COM
17. “I'VE BEEN WORKING ON A NEW ELECTRONIC CASH SYSTEM THAT'S FULLY PEER-TO-PEER, WITH NO TRUSTED THIRD PARTY.” THE PAPER CLAIMED BLOCKCHAINLAWCLASS.COM
18. TIME FOR A LITTLE MORE HISTORY ... BLOCKCHAINLAWCLASS.COM
19. 2008 - FINANCIAL CRISIS LIVE SHOT OF BEN BERNANKE’S DESK 9/15/08 BLOCKCHAINLAWCLASS.COM
20. 2008 - FINANCIAL CRISIS 9/15/2008 - LEHMAN BROTHERS FILES FOR BANKRUPTCY 5/29/2008 - BEAR STEARNS IS SOLD AT MASSIVE DISCOUNT 9/14/2008 - MERRILL LYNCH IS SOLD AT MASSIVE DISCOUNT BLOCKCHAINLAWCLASS.COM
21. THE RESPONSE = BAILOUTS + QUANTITATIVE EASING BLOCKCHAINLAWCLASS.COM
22. BAILOUTS + QUANTITATIVE EASING BLOCKCHAINLAWCLASS.COM
23. TREMENDOUS AMOUNT OF MONEY FROM CENTRAL BANKS PROPPED UP THE FINANCIAL WORLD BLOCKCHAINLAWCLASS.COM
24. THE CREATOR OF BITCOIN WAS HOSTILE TO THIS TYPE OF MONETARY POLICY BLOCKCHAINLAWCLASS.COM
25. HOSTILITY TO CENTRAL BANKERS IS ONE OF THE REASONS BITCOIN HAS A HARD CAP OF 21 MILLION BITCOIN TOTAL BLOCKCHAINLAWCLASS.COM
27. THIS DOESN’T TELL THE WHOLE STORY BLOCKCHAINLAWCLASS.COM
28. GOTTA GO BACK EVEN FURTHER... BLOCKCHAINLAWCLASS.COM
29. 1996 - 2004 - DOT COM BUBBLE BLOCKCHAINLAWCLASS.COM
30. TRUCKLOADS OF MONEY ARE DUMPED INTO ANY COMPANY CLAIMING TO DO ANYTHING RELATED TO THE INTERNET BLOCKCHAINLAWCLASS.COM
31. SOUND FAMILIAR? BLOCKCHAINLAWCLASS.COM
32. OKAY TIME TO SHIFT GEARS FOR A SECOND … BLOCKCHAINLAWCLASS.COM
33. THE INFRASTRUCTURE OF THE INTERNET IS FOCUSED ON HOW DATA IS HANDLED AND HOW IT IS SENT THROUGH THE NETWORK BLOCKCHAINLAWCLASS.COM
34. OPEN SYSTEMS INTERCONNECTION (OSI) MODEL BLOCKCHAINLAWCLASS.COM
35. INTERNET INFRASTRUCTURE BLOCKCHAINLAWCLASS.COM
37. WHAT’S MISSING FROM THE INFRASTRUCTURE? BLOCKCHAINLAWCLASS.COM
38. TRUST AND IDENTITY BLOCKCHAINLAWCLASS.COM
39. THE PROBLEM OF TRUST AND IDENTITY WHO CAN YOU TRUST? WHAT CAN YOU TRUST? BLOCKCHAINLAWCLASS.COM
40. THESE PROBLEMS LIE AT THE CORE OF WHAT BITCOIN PURPORTS TO DO BLOCKCHAINLAWCLASS.COM
41. THE ECONOMIST CALLS BLOCKCHAIN ‘THE TRUST MACHINE’ BLOCKCHAINLAWCLASS.COM
42. BLOCKCHAINLAWCLASS.COM BUT IT ALL BEGINS WITH BITCOIN...
43. SO LETS GO BACK TO THE 2008 BITCOIN WHITE PAPER https://bitcoin.org/bitcoin.pdf BLOCKCHAINLAWCLASS.COM
44. THE DOUBLE SPEND PROBLEM “A payee can verify the signatures to verify the chain of ownership. The problem of course is the payee can't verify that one of the owners did not double-spend the coin. A common solution is to introduce a trusted central authority, or mint, that checks every transaction for double spending.” https://bitcoin.org/bitcoin.pdf BLOCKCHAINLAWCLASS.COM Bitcoin White Paper
45. THE DOUBLE SPEND PROBLEM HOW CAN YOU BE SURE THAT THE DIGITAL MONEY YOU RECEIVED HAS NOT ALREADY BEEN SPENT? TRADITIONALLY BANKS PROVIDED THE SOLUTION — BITCOIN OFFERS A DECENTRALIZED SOLUTION BLOCKCHAINLAWCLASS.COM
46. THE DOUBLE SPEND PROBLEM TRANSACTIONS ON THE BITCOIN NETWORK ARE PUBLIC TO EVERYONE IN THE NETWORK BLOCKCHAINLAWCLASS.COM (BLOCKCHAIN CAN BE PRIVATE IN OTHER INSTANCES)
47. THE DOUBLE SPEND PROBLEM THUS, ANYONE CAN VERIFY THAT FUNDS ON THE BITCOIN NETWORK HAVEN’T BEEN SPENT YET BLOCKCHAINLAWCLASS.COM
48. DIGITAL ASSETS BITCOIN RESULTS IN THE FIRST UNIQUE VERIFIABLE DIGITAL PROPERTY BLOCKCHAINLAWCLASS.COM
49. ‘THE TRUST MACHINE’ CRYPTO INFRASTRUCTURE IS A NEW WAY TO HANDLE TRUST ON THE INTERNET BLOCKCHAINLAWCLASS.COM
51. 2009 - BITCOIN NETWORK GOES LIVE BLOCKCHAINLAWCLASS.COM
52. SO THEN WHAT ? BLOCKCHAINLAWCLASS.COM
53. SO THEN WHAT ? BUY PIZZA BLOCKCHAINLAWCLASS.COM
54. 2010 - THE BITCOIN PIZZAS ON MAY 22, 2010 A PROGRAMMER BOUGHT TWO PAPA JOHN’S PIZZAS FOR 10,000 BITCOIN BLOCKCHAINLAWCLASS.COM
55. 2010 - THE BITCOIN PIZZAS 10,000 BITCOIN CURRENT VALUE $35 MILLION+ IN 2019 BLOCKCHAINLAWCLASS.COM
56. OKAY, MAYBE TRADE SOME BITCOIN BACK AND FORTH IN CASE IT’S WORTH SOMETHING LATER BLOCKCHAINLAWCLASS.COM TRADE AND MINE
57. 2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM
58. 2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM EARLY ON MT. GOX WAS THE LARGEST BITCOIN EXCHANGE
59. 2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM AT ITS HEIGHT MT. GOX HANDLED 70% OF ALL BITCOIN TRANSACTIONS
60. 2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM IN 2013, MT. GOX ‘LOST’ 850,000 BITCOINS VALUED AT $450 MILLION (NOW WORTH MORE THAN 7 BILLION)
61. HOW TO BURST A BUBBLE BLOCKCHAINLAWCLASS.COM
62. OTHER UNSAVORY THINGS BLOCKCHAINLAWCLASS.COM 2011 - 2013 SILK ROAD
63. SILK ROAD WAS EBAY FOR ILLEGAL STUFF BLOCKCHAINLAWCLASS.COM 2011 - 2013 SILK ROAD
64. THE END OF THE ROAD 2015 RECEIVES LIFE SENTENCE FOR MONEY LAUNDERING, COMPUTER HACKING, CONSPIRACY TO TRAFFIC NARCOTICS ROSS ULBRICHT AKA THE DREAD PIRATE ROBERTS
65. PARODY COINS? BLOCKCHAINLAWCLASS.COM 2014 - 2014 COINYE
66. PARODY COINS? BLOCKCHAINLAWCLASS.COM KANYE WEST SUED CONYE AND THUS THE COIN NEVER WENT LIVE
67. PARODY COINS? BLOCKCHAINLAWCLASS.COM DOGECOIN STILL HAS MARKET CAP OF 225M IN 2019
68. BLOCKCHAINLAWCLASS.COM WHILE THESE CRAZY PROJECTS WERE GOING ON … SOMETHING WAS HAPPENING
69. INNOVATORS AND EARLY ADOPTERS BLOCKCHAINLAWCLASS.COM
70. ORGANIZATIONS START TO GET EXCITED ABOUT THE TECHNOLOGY THAT UNDERLIES BITCOIN THE BLOCKCHAIN BLOCKCHAINLAWCLASS.COM
72. BLOCKCHAIN PATENTS FILINGS START MOVING 2011 - 2016 BLOCKCHAINLAWCLASS.COM
73. BLOCKCHAIN PATENTS FILINGS START MOVING http://patentvue.com/2018/01/12/blockchain-patent- filings-dominated-by-financial-services-industry/ BLOCKCHAINLAWCLASS.COM
74. BLOCKCHAIN PATENTS FILINGS START MOVING BLOCKCHAINLAWCLASS.COM http://patentvue.com/2018/01/12/blockchain-patent- filings-dominated-by-financial-services-industry/
75. LARGE ORGANIZATIONS START TO KICK THE TIRES ON CRYPTOCURRENCY AND BLOCKCHAIN TECHNOLOGY BLOCKCHAINLAWCLASS.COM
76. BIG PLAYERS SHOWING UP
77. ENTERPRISE CONSORTIUMS 25 GLOBAL CONSORTIUMS 13 IN FINANCIAL SERVICES 2 IN HEALTHCARE 10 IN THE USA, THREE IN THE UK 22 STARTED IN 2016 BLOCKCHAINLAWCLASS.COM SOURCE: DATA FROM 2016, WILLIAM MOUGAYA
78. FOUR WORKING ON ASPECTS OF STANDARDS AVERAGE NUMBER OF MEMBERS IN EACH: 25 LARGEST MEMBERSHIPS: 100 (HYPERLEDGER AND ISITC) TOTAL NUMBER OF PARTICIPANTS: 550 ENTERPRISE CONSORTIUMS SOURCE: DATA FROM 2016, WILLIAM MOUGAYA BLOCKCHAINLAWCLASS.COM
79. BLOCKCHAIN + ROBOTICS BLOCKCHAIN + AUTOMATION BLOCKCHAIN + INTERNET OF THINGS BLOCKCHAIN + ARTIFICIAL INTELLIGENCE BLOCKCHAIN + OTHER EMERGING TECH BLOCKCHAINLAWCLASS.COM
80. LAW FIRMS WADE INTO THE WATERS BLOCKCHAINLAWCLASS.COM
81. ADDITIONAL EARLY EXAMPLES IN LAW-LAW LAND
86. legalconsortium.org
87. AS A MATTER OF FULL DISCLOSURE LEXPREDICT IS A COMPANY CO- FOUNDED BY DAN KATZ https://agreements.network/ (ONE OF THE INSTRUCTORS OF THIS COURSE) (ONE OF THE INSTRUCTORS OF THIS COURSE)
88. THE NUMBER OF COINS BLOCKCHAINLAWCLASS.COM GROWS SUBSTANTIALLY
89. “EVERY TIME THERE IS A NEW ICO A SECURITIES LAWYER GETS THEIR WINGS …” ICO’S TAKE OFF BLOCKCHAINLAWCLASS.COM
90. https://www.cnbc.com/2017/11/27/bitcoin-exchange-coinbase- has-more-users-than-stock-brokerage-schwab.html https://www.cnbc.com/2017/11/27/bitcoin-exchange-coinbase-has- more-users-than-stock-brokerage-schwab.html COINBASE VS. CHARLES SCHWAB BLOCKCHAINLAWCLASS.COM
91. BUBBLE MANIA ? BLOCKCHAINLAWCLASS.COM
92. SPEED OF TECHNOLOGY ADOPTION BLOCKCHAINLAWCLASS.COM
93. SO IS IT CRYPTOMANIA ? BLOCKCHAINLAWCLASS.COM
94. OR IS THIS A FUNDAMENTAL TECHNOLOGICAL TRANSFORMATION ? BLOCKCHAINLAWCLASS.COM
95. ONLY TIME WILL TELL … BLOCKCHAINLAWCLASS.COM
96. BLOCKCHAINLAWCLASS.COM FOR MORE MODULES VISIT
97. DANIEL MARTIN KATZ E D U | I L L I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW
98. @ computational professor daniel martin katz danielmartinkatz.com BLOCKCHAIN, CRYPTOCURRENCY AND LAW professor nelson rosario THE PATH TO CRYPTOMANIA - BITCOIN AND BEYOND nelsonmrosario.com @ nelsonmrosario BLOCKCHAINLAWCLASS.COM