Blockchain - Reed Smith LLP

Jul 25, 2017 - of conducting illicit activity, such as the black market activity that tainted ...... market and the first modern darknet (a network overlay that is only.
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FinTech

Blockchain Distributed ledger technology and designing the future



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Contents Foreward by the Chamber of Digital Commerce vi The mysterious origins of blockchain

1

Blockchain 101

5

How it works

5

Digital currencies or “cryptocurrencies”

7

Advantages of blockchain / DLT

7

Disadvantages of blockchain / DLT

8

Open vs. closed blockchains

10

Summary 11

Smart contracts

13

What they are

13

Advantages of smart contracts on blockchains

13

Disadvantages of smart contracts

14

Smart contracts and derivatives

15

U.S. regulatory landscape

17

State regulation

18

Federal regulation and guidance

24

Enforcement 30 Conclusion 31

International regulatory landscape

33

Europe 34 Asia 38 The Americas

40

Middle East

40

Africa 43

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Insuring digital currency and digital currency business

45

Insurance and underwriting issues

47

Potential insurance coverage under traditional policies

47

Cyberattacks and ransomware

47

Financial institution bonds and commercial crime policies

48

D&O Insurance

49

E&O insurance

50

Kidnap and ransom (K&R) insurance

51

The bottom line

51

Applications in capital markets

53

Greater efficiencies

54

More security and transparency

55

Tokenizations 60 Potential risks

Blockchain innovation in the energy, commodities, shipping and trade finance industries

60

63

Energy producers and consumers

64

Energy trading

65

Shipping 67 Trade finance

Privacy and re-identification on the blockchain

69

73

Privacy 73

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Psyeudonymity concerns

75

Industry-specific privacy concerns

76

Smart contracts

77

Blockchain: Distributed ledger technology and designing the future

Intellectual Property

79

Bitcoin’s open source license

79

Other blockchain application licenses

80

The rise of blockchain patents

80

Social impact, responsibility and media

83

Lowered transaction fees mean more money for causes

83

Greater transparency

83

Access to financial services

84

Financial empowerment

84

Initial/Independent coin offerings (ICOs)

85

Blockchain, media and advertising

86

Social media

87

Improving governance and minimizing corruption

87

Corporate social responsibility

87

Summary 87

Closing note

89

Glossary of terms

91

Key contacts

96

Endnotes 98

Contents

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Foreward by the Chamber of Digital Commerce

We commend our good friends at Reed Smith for

key to building a successful company in the blockchain

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