The Blockland Solutions Conference, held on December 1-4, 2018, in Cleveland was the first conference of its kind in Ohio. It represented a significant shift forward in the mindset of both the private and public sectors in the Midwest when it comes to blockchain. Blockchain technology generally creates a digital ledger of records or transactions recorded in verifiable, permanent, and immutable digital blocks and distributed (linked or chained) using cryptography across a decentralized network.
In its inaugural event, Blockland brought together over 1,700 technologists, business leaders, and government representatives to discuss and study the use cases of blockchain across a multitude of industries. Attendees from biomed, insurance, finance, startups, and Fortune 500s alike converged on Cleveland to take part in a conversation about the business and legal implications of one of the more promising and pervasive advancements that will support a wave of next generation technologies.
Blockchain is a Tool, Not a Business
With all of the buzz around blockchain and last year’s crypto mania, many have started to talk about and refer to blockchain as an industry unto itself – this simply isn’t true. Blockchain – while powerful – is a tool. Executives at Oracle, Kroger, and KeyBank all spoke to this tool’s power to influence corporate strategy and documentation, but none said their enterprises were “moving into the blockchain space.” Blockchain should not be mistaken as a target market or a business unit, rather, it is but one arrow in any enterprise’s quiver. This is an important narrative distinction. Blockchain will continue to challenge R&D departments and shape corporate strategy, but (much like the internet) it is a means to an end – not an end itself.
Blockchain and the Law: Securities and Smart Contracts
Since 2017’s crypto mania, the market has been closely watching lawmakers and regulators to see where and how legal frameworks would develop around blockchain. If the Blockland Solutions Conference was any indication of overarching legal market trends, we will see movement in two main areas: securities and smart contracts.
There has already been a fair amount of activity in securities regulation from the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, and other market regulators regarding the securitization and commoditization of digital assets such as cryptocurrencies (think Bitcoin and Ethereum). As cryptocurrencies (and asset tokenization more generally) evolve, so too will the laws governing them. That said, market players are hopeful that the regulatory bodies will not over-regulate asset tokenization while it is still in its nascent stages. A careful balance must be struck between protecting the market and remaining highly competitive on the global financial stage.
Similarly, smart contracts will be a hot-button legal issue. As the use of smart contracts are first deployed in the most obvious (read: easiest) use cases over the next three to five years, transactional attorneys would be wise to have at least a working knowledge of smart contracts. Some attorneys will likely begin a practice focus in structuring and administering smart contracts. Clients will realize value from attorneys that can efficiently work in this space, and will also enjoy reduction in the use of conventional middle man services, such as escrow agents (all possible with smart contracts). While still in its early stages, smart contracts will have wide-reaching impacts, from supply chain traceability to insurance and finance.
Blockchain in Ohio
Ohio, and Cleveland especially, is committed to being one of the most “blockchain friendly” ecosystems in the country and is striving to position itself at the forefront of blockchain thought leadership. In fact, the state of Ohio is now the only state in the country that is allowing full payment of state taxes using cryptocurrency. Beyond that, the state is incentivizing companies to hire blockchain software developers and industry titans, and government agencies alike have committed to implementing blockchain in their technical stack in an effort to attract this talent. From deep roots in consumer goods and logistics to finance and insurance, Ohio is uniquely positioned to become a hub for bleeding edge implementation of blockchain tech. The success of the Blockland Solutions Conference bears this out. Time will tell, however, if this frenzy of excitement will lead to permanent growth.
As always, Ulmer is committed to keeping up with our clients’ latest technological advances, and we are already serving a handful of adventurous clients in the world of blockchain. If you have any questions about blockchain, please feel free to reach out to the attorneys listed below.
About the Attorneys
Robert E. Chudakoff is a partner and litigator who has extensive experience in the defense and prosecution of intellectual property claims. He also serves on the Blockland Legal Node, which is part of Blockland’s governing body. Lucas V. (Duke) Haugh is a partner with a background in electrical and software engineering and focuses his practice on patent prosecution and litigation. He also counsels a wide variety of IP clients on patent, trademark, copyright, and technology-related matters. Maxwell Berg is a corporate attorney and his practice focuses on emerging businesses and fundraising. He also assists clients with intellectual property and technology matters.