by A. Horrigan
11-Mar-2018
These are show notes from a live interview on WPKN radio with guest Joshua Ashley Klayman, hosted by Jim Motavalli and Alice Horrigan and aired February 27, 2018. Full replay.
Joshua Ashley Klayman was working as a leveraged-finance corporate lawyer when she heard about bitcoin, and she didn't think much of it. Then she got wind of "smart contracts" and how they can reduce legal spending through automation.
Her firm, Morrison Foerster (MOFO), formed a blockchain and contracts group, and Klayman has become one of the best known blockchain lawyers in the world. She chairs the Wall Street Blockchain Alliance’s Legal Working Group.
The if-then logic of a smart contract on a blockchain is like a vending machine, notes Klayman. Put in money, get potato chips—completely automated.
The difference is a smart contract has the potential to automate much more complex transactions. Missed your plane? Get your instant payment from the travel insurance company without even having to submit a claim. (The insurance company will know you missed your plane by tapping into the airline's database.)
A Spider Web in the Basement
The law touches many areas of technology and blockchain is no exception, says Klayman.
Lawyers help clients sort through a maze of issues and regulations related to digital tokens and cryptocurrencies, investment advising, securities, commodities, money transfers, intellectual property, general corporate law and more—“You name it,” says Klayman.
There often is no established precedent.
Klayman likens the current regulatory environment to a rather unpleasant surprise in a dark basement: “When you go into a dark basement and it appears that everything’s clear...and you feel something on your cheek...and it's a spider web—that’s the regulations.”
Part of the challenge is figuring out where we actually need laws. “In certain cases you might need to provide enabling legislation,” notes Klayman. But often “existing laws are enough.”
The Mystery of the Token
Lawyers, lawmakers and regulators are trying to get a grasp on the fluid nature of a token. “There is no monolithic digital token,” says Klayman. Essentially it’s a string of numbers on a distributed ledger, like a credit card number, and you can ascribe many different values to it.
For example, you could say anyone with that string of numbers is able to buy a certain piece of software, or that they get $5.00. Or, that they can vote on something.
There are no bright-line rules. The tokens in token sales, or initial coin offerings ( ICOs)—a way to raise capital that has emerged with blockchain technology—are sometimes considered a security by federal law, and sometimes not.
“Trying to figure out how those token sales fit into existing law” is a challenge, says Klayman.
A Movement Toward Decentralization
For Klayman, blockchain has come to mean a lot more than automation-enabling contracts. It’s a movement toward decentralization, toward “having a seat at the table where people may not have had a seat previously--where you don’t have to go through an intermediary in order to transact business.”
"This is a great opportunity for people who are underrepresented to get involved,” says Klayman, citing as an example the potential for people to take control over their own personal data.
About a recent New York Times article on the boy culture in the blockchain space, Klayman says, “It’s important to take stock and say, ‘Hey no, this is going to be different this time.'"
Klayman actively advocates for diversity in blockchain. She recently attended a Brooklyn symposium for women in blockchain, which inspired the formation of a new group, The Collective Future .
“The goal is to embrace diversity and find value in diversity.” And not just for women. “There are a lot of different kinds of diversity,” says Klayman, and “there are a lot of great men out there.”
Resources
- Morrison Foerster profile of Joshua Klayman
- Wall Street Blockchain Alliance’s Legal Working Group
- The Collective Future
- Women in Blockchain Global LinkedIn Group
- Blockchain Technology Research Innovations Corporation (BTRIC)
About the Show
Jim Motavalli is a widely known freelance journalist, speaker, book author, radio personality and expert on all things environmental. He blogs weekly for The New York Times, Mother Nature Network, BNET and The Daily Green, is a regular contributor to The New York Times’ "Automobiles" section, and has a weekly syndicated "Wheels" column.
Alice Horrigan is a writer and creative content manager specializing in blockchain technology, with a background in journalism, business and IT communications, and a master's degree in cultural sociology. She recently started blogging about blockchain and cryptocurrency on Steemit.
WPKN is a 10,000-watt non-commercial, listener-supported radio station in the United States, founded in 1963. The station serves a potential listenership of 1.5 million in Connecticut, Long Island, and parts of New York and Massachusetts. Programs include music and alternative information, in an eclectic mix of free-form programming that seeks to serve those whose needs are not met by mainstream media in a unique and vibrant way.
Listen to the full radio interview with Joshua Klayman.
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