The impact of blockchain, cryptocurrencies, and NFTs on the legal industry with Joseph Raczynski

It was a ton of fun recording this podcast with the omniscient and ever engaging Joseph Gartner at the ABA Center for Innovation – (full transparency, I sit on the Council). With Joey’s new role as Director and Counsel, we chatted all things #blockchain#cryptocurrencies, and #NFTs and their impact on the legal industry.  It is fantastic to be a part of a group pushing on #innovation in the legal industry at the ABA with Chair, Don Bivens and the entire Center for Innovation Governing Council.

https://www.buzzsprout.com/1784333/8764341-the-impact-of-blockchain-cryptocurrencies-and-nfts-on-the-legal-industry-with-joseph-raczynski

Podcast: The Hearing – Stevie Ghiassi, Co-founder Legaler and Legaler Aid

Question: What do the Iranian national football team, NFTs, Hotel Rwanda and tennis great, Andy Murray have in common?

Answer: Stevie Ghiassi, Co-founder of Legaler and Legaler Aid. And my guest this week!

In this episode, Stevie chats with me about his unlikely journey from running a chain of souvenir shops to becoming a legal tech entrepreneur. He also talks about the important work that Legaler Aid is doing, and ways in which legal tech and blockchain have helped them pivot after Covid took away traditional fundraising streams.

Yet again we’re seeing innovative ways that cryptocurrency and blockchain are being used, and how they offer real opportunities for the legal industry.

Apple:

https://podcasts.apple.com/us/podcast/ep-78-stevie-ghiassi-legaler/id1389813956?i=1000524478029

Google: https://podcasts.google.com/feed/aHR0cHM6Ly9wb3J0YWwtYXBpLnRoaXNpc2Rpc3RvcnRlZC5jb20veG1sL3RoZS1oZWFyaW5n/episode/aHR0cDovL2F1ZGlvLnRoaXNpc2Rpc3RvcnRlZC5jb20vcmVwb3NpdG9yeS9hdWRpby9lcGlzb2Rlcy9FcDc4X1N0ZXZpZV9HaGlhc3NpX21peGRvd24tMTYyMjgxMTgwNDQ2MjA3MzUyNi1NekkyT1RFdE56VTVNelkxTkRBPS5tcDM?sa=X&ved=0CAUQkfYCahcKEwjAm42r05XxAhUAAAAAHQAAAAAQCg&hl=en

Podcast: The Hearing – Federico Ast – Cofounder & CEO – Kleros

From the producer: Here at The Hearing HQ we’ve really missed travelling. So being whisked (virtually) to Buenos Aires for this week’s episode was a real treat!

Meet Joe’s guest, Federico Ast, the CEO and founder of Kleros. He’s deeply intelligent, thoughtful and one hell of an aggravator in the world of justice. Federico has a philosophy-centered approach to improving judicial systems around the world, and talks to Joe about how deliberative democracy can fast-track access to justice.

Kleros is an online dispute resolution system based on blockchain, crowdsourcing and game theory. We hear how Federico has used his experience of the Argentinian economic collapse of the 90s to problem-solve dispute resolution for the internet age.

Listen Here:

Apple: The Hearing – A Legal Podcast – EP. 73 – Federico Ast (Kleros) 

Google: The Hearing – A Legal Podcast – EP. 73 – Federico Ast (Kleros) 

Facebook’s Cryptocurrency Needs to Prove Itself, Expert Says

Published on Lifewire

Written by Michelai Graham – Interview with Joseph Raczynski

Facebook is scaling back its ambitious plans to move into the cryptocurrency sector while users on the platform aren’t showing much confidence in the site’s new addition.

The media giant will likely launch its smaller scale Libra cryptocurrency project as soon as January. Libra was originally supposed to be a new currency backed by fiat money (a currency established as money by the government) and securities (tradable financial assets). Libra will now work as a stable coin, meaning it won’t fluctuate in value as it’s pegged to something like the US dollar or a basket of currencies.

“It was only a matter of time before a private company went down the road of their own cryptocurrency,” Joseph Raczynski, a technologist and futurist for Thomas Reuters told Lifewire in an email. “I was very excited to hear this was going to happen last summer, but skeptical to see how it would transpire.”

What Exactly Is Facebook Trying to Do With Cryptocurrency Anyway?

Cryptocurrency is the private industry’s brand new way to exchange value over the internet, Raczynski said, and Facebook wants to take advantage of that. 

Raczynski has been working with cryptocurrency since the creation of Bitcoin in 2011 and has even created his own cryptocurrencies before. He said the most appealing aspect of cryptocurrency is the security and ease of use. Unfortunately, cryptocurrency is still just an idea of the future for some people, which may be a struggle for Facebook as it plans to launch soon. 

“At its most basic, cryptocurrency is the representation of value on the Internet,” Raczynski explained. “The first stage that people should be cognizant of is that a cryptocurrency will be similar to a digital dollar.”

“It was only a matter of time before a private company went down the road of their own cryptocurrency.”

Facebook plans to launch a single dollar-backed coin, and eventually a wallet called Novi, to send and receive Libra currencies. Digital wallets are encrypted, Raczynski explained, so only the user would have access to it. With Novi, Facebook users can manage their digital coins within Facebook’s apps, including Messenger, WhatsApp, browsers, and other connected apps. With the use of a single currency, Raczynski thinks it will make the barrier to do things much easier to manage.

“Anyone using Facebook around the world could exchange their local currency for the Facebook currency,” he said. “Anything you want to buy, services rendered, or simply exchanging money could happen across the world with a unified Facebook currency.”

Are Facebook Users Ready for Libra? 

With all of the changes to Facebook’s cryptocurrency plans, users may be skeptical of its efficacy, yet the appeal of being able to easily send and receive money digitally may (eventually) trump those doubts. The social media giant is no stranger to discussing privacy, so it better be prepared to talk about its plans to track cryptocurrency usage on its site.

“Facebook is a lightning rod for controversy,” Raczynski said. “What they do or don’t do with users’ personal data and tracking user habits is a constant in the news and most people’s minds. It really is a broadening of what Facebook can do to trace and track habits and data patterns.”

Facebook users are probably already using digital wallets like PayPal and Venmo, and Facebook’s Novi will work similarly to those. What they all have in common is the fact that the platforms own and manage users’ digital wallets. 

https://www.facebook.com/plugins/video.php?href=https%3A%2F%2Fwww.facebook.com%2Fnovi%2Fvideos%2F859686647872438%2F

In the “real” cryptocurrency world, users have full ownership of their digital wallets, which are protected by private keys—a public address to share with anyone to make transactions with and a private one that shouldn’t be shared and essentially makes the wallet yours. So, while your money would still be yours via Facebook’s digital wallet, you don’t “own” the system it runs on.

Another important aspect to note is that while Libra is slightly more decentralized than a country’s own monetary system, like the US dollar, it’s still centralized around a number of companies serving as validators. While it might be a better system to use, according to Raczynski, it’s still susceptible to hacks because there are relatively small sets of attack points.

Why Is This Important?

This new currency Facebook is creating won’t rely on the government, and will instead be backed by an extensive portfolio of companies, including those in the Libra Association. 

“They have developed a governance where mega companies run computer nodes/servers that verify transactions between people or companies,” Raczynski said. “Now, in concept, this is similar to what Bitcoin established 11 years ago, only Facebook is run by upwards of 100 companies and their servers, rather than tens of thousands of computers which are not influenced by those private companies.”

In the not-too-distant future, Raczynski said, every asset people have will be represented by a cryptocurrency, from cars to real estate and beyond. This reach could also help people around the world who don’t have access to physical banks.

“Anything you want to buy, services rendered, or simply exchanging money could happen across the world with a unified Facebook currency.”

“There are few things that will be as technologically transformative in the world as cryptocurrency over the next ten years,” said Raczynski. “I am most excited about how it has the potential to help the unbanked, and [help] people living in developing countries rise up and take ownership of their own assets and build wealth.”

Despite Raczynski’s confidence in the growth trajectory of cryptocurrency over the next decade, people will have to learn more about crypto to believe using it on Facebook is a real thing, just as online shopping prompted much skepticism across the world when it first became reality. That, however, is on Facebook to prove.

Podcast: The Hearing – Doug Pepe – Partner – Joseph Hage Aaronson LLC

From the producer: You may have watched as Mark Zuckerberg explained the internet to Congress in a way that felt a bit unnecessary. Well, this episode is sort of the opposite of that. Joe Raczynski is joined by legal and mathematical macroeconomics genius Doug Pepe, to take us through blockchain, tokens and cryptocurrency in a way that’s genuinely enlightening.

The legal industry is sometimes accused of not keeping up, but we know that’s not true. Lawyers are occupying this space now. Their clients are very active and they have a crucial role to play in the serious policy issues being debated.

Doug, a partner at Joseph Hage Aaronson, started his blockchain journey by building gaming computers with his young children, and then teaching them how to mine bitcoin. Fast forward and Doug is now an expert on blockchain privacy, smart contracts and digital identity.

Apple: https://podcasts.apple.com/us/podcast/ep-68-doug-pepe-jha/id1389813956?i=1000503066806

Google/Android: https://podcasts.google.com/feed/aHR0cHM6Ly9wb3J0YWwtYXBpLnRoaXNpc2Rpc3RvcnRlZC5jb20veG1sL3RoZS1oZWFyaW5n/episode/aHR0cDovL2F1ZGlvLnRoaXNpc2Rpc3RvcnRlZC5jb20vcmVwb3NpdG9yeS9hdWRpby9lcGlzb2Rlcy9FcDY4X0RvdWdfUGVwZV9taXhkb3duLTE2MDgzMDQxMDgzMzgzNDc3MDctTXpFMk9UVXROelF6TVRNME16WT0ubXAz?sa=X&ved=0CAUQkfYCahcKEwjo-ObCpN_tAhUAAAAAHQAAAAAQAw

Find out more at tr.com/TheHearing

LegalTech Report Card and Predictions 2020 to 2060 – ILTA Conference 2020

I had the privilege of being selected to report on how ILTA (International Legal Technology Association) did on their predictions from 2013 up to today, during their 2020 ILTA-ON Conference. Even more fun, predicting what technology and LegalTech will look like from 2020-2025, and then going out to 2060.

Remember back when we had ‘Law Firm 2020 predictions’? In the first part of my ILTA-ON presentation, we will go ‘Back to the Future’ reviewing past predictions to see what came true and what we got wrong. Then, we will blast into a journey of what LegalTech looks like in the next five years. Lastly, for those who get motion sickness, grab your Dramamine, because we will take a 1.21 gigawatts ride, shooting into the future. We will predict what the technological and legal landscape will look like in 2030, 2040, and into the Singularity! Great Scott!

Part 1 – Jump Ahead (9:17): Grading the Law Firm 2020 report from 2013: https://youtu.be/UgyDyBSJ3AA?t=558

Part 2 – Jump Ahead (22:55) Predictions for 2020-2025: https://youtu.be/UgyDyBSJ3AA?t=1377

Part 3 – Jump Ahead (40:17) Technology Predictions 2030, 2040, 2050, and 2060: https://youtu.be/UgyDyBSJ3AA?t=2419

The 4th Annual Government Day: The Reality and Skepticism of Innovation and Blockchain

Originally published on the Legal Executive Institute

By Joseph Raczynski

WASHINGTON, D.C. — The Government sector strives to ramp up its efforts to more widely integrate cutting edge technologies like blockchain, artificial intelligence, and the Internet of Things (IoT), it is running into a myriad of challenges.

Not the least among them, is separating the reality from the hype of these miracle tech solutions.

At Thomson Reuters 4th Annual Government Day, panel attempted this separation by focusing on blockchain, working to uncover the reality of this technology today for governments and cut out the hype of this innovative technology.

Government supply chain management

One area the panel focused on with blockchain is the tech’s potential to change supply chain management, offering a scenario in which a state or federal agency needs to identify the ground zero genesis of a fruit or vegetable foodborne illnesses. The newest proof of concepts utilizes a blockchain-enabled IoT supply chain management technology ecosystem that can save lives by greatly reducing the time it takes to track contaminated tomato from the salad bar back though delivery, distributers, wholesalers, to pickers and finally to the farm.

The panel also discussed how a Massachusetts-based farmer could partner with a technologist to track his tomatoes from vine to fork. The farmer uses IoT temperature gages from the pickers to the platers. This is an example of a public and private partnership where produce with clear data on temperature, handlers, and distributers can be audited through the entire supply chain, all supported on a distributed ledger.

Harnessing this collection of technologies, any listeria outbreak can reduce seven days of research to just seven minutes, ensuring that the U.S. Food and Drug Administration (FDA) have rapid response and control.

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Sovereign identity

Another area the panel discussed included identity management solutions. Breeches to our own private information are commonplace. In fact, recently Facebook suffered yet another attack where 200 million users’ phone numbers were found in a publicly facing open database, including the number of Facebook CEO Mark Zuckerberg. (In case you are wondering, calling Mr. Zuckerberg’s phone number goes to a generic voicemail.)

Not surprisingly given the stakes, various federal agencies have been surveilling this space for some time. An emerging concept about how to prevent such breaches and other identity security mishaps in the future is taking form.

The panel also took up the “radical” idea that the U.S. Department of Homeland Security (DHS) could issue a new unique identifier to replace a citizen’s Social Security Number (SSN). In a major shift, this identifier would exist on a blockchain. This decentralize system would place the control of the identifying number into the hands of the individual, removing a central repository, which could be hacked.

Panelist Alan Cohn, a partner at Steptoe & Johnson, pointed out how this could more securely enable our current voting system, curtailing the chance of fraud and make voting easier for all.

Digital assets

Finally, the panel explored the shifting landscape of digital assets. Cohn said he expects a huge swing in the way we look at assets from a personal perspective and in how the government views it.

The panel concluded that with Facebook launching its own cryptocurrency, Libra, this process has been legitimized. The discussion amped up around what will happen next. I suggested to the panel that Libra could be dead in the water in the United States because of a heightened regulatory concern, but this blockchain-enabled asset cannot be placed back into the bottle. Indeed, with years of consternation ahead from regulators on Libra, companies around the globe will move forward, and the next organization to create what amounts to a world currency will be a messenger app which has 500 million users, Telegram. (Expect its launch before Halloween 2019.)

In all likelihood, governments around the world will be spooked by the immense power an app founded in 2013 will create. They will have a scalable, frictionless asset with features that could bypass anti-money laundering (AML) rules and Know Your Customer (KYC) regulations.

Panel moderator Jason Thomas, Manager of Innovation at Thomson Reuters, and panelist Gail Gottehrer, of the Law Office of Gail Gottehrer, noted that there is significant promise ahead with the intermixing of multiple technologies in combination with blockchain. Indeed, governments are beginning to adopt and adapt in this environment; and with a push from the private sector, state and federal agencies will continue to adjust.

The synthesis of technologies like IoT, AI, and blockchain will create processes which should stamp out farm- and distribution-based foodborne illnesses. New initiatives around the security of personally identifiable information through blockchain will place the control of information into an individual’s hands, removing central points of failure and reducing costly and damaging data breaches.

Lastly, one of the most significant changes ahead is the look and feel of our ownership of assets when everything becomes digital. The opportunity is immense, but so are the concerns around our government’s ability to counter AML as assets become increasingly liquid and frictionless across the globe.

Forum Magazine: Blockchain’s Promise – Verifying Value One Block at a Time

Originally published in Forum Magazine 

by Joseph Raczynski

Blockchain technology is truly transformative, impacting almost every industry. Over the next decade, this technology will significantly transmute the legal landscape as well – a process that has already begun.

Blockchain was initially considered a ridiculous notion – the idea of a digitized ledger beholden to no single owner was derided as unusable. However, the conversion of blockchain from joke to genuine is stark. For example, the top 50 banks in the world have unified in the realization this technology could disrupt the financial industry.

For those newer to blockchain technology, here’s a brief history: In its simplest form, the term “blockchain” refers to a peer-to-peer network of computers running a common software protocol that includes a database replicated on each computer connected to the network, where each user interaction (other than a query) is recorded as a new entry. (Each computer is called a “node,” while the database is often referred to as a “distributed ledger.”)

Further, each blockchain has a mechanism, referred to as a “consensus algorithm,” for ensuring that each copy of the ledger is updated in a consistent manner and is otherwise identical to all other copies of the ledger across the network. Thus, once a transaction has been recorded on the ledger, that record is shared among all the ledger’s users, and generally, it can’t be deleted or overwritten.

Is this technology ushering in an era that creates an undeniable source of truth for contracts and digital identity? How else might it impact how law is practiced and how the legal industry operates?

The Smart Contract

Central to any discussion of blockchain and its legal impact is understanding “smart contracts,” a term that has been around for decades but in this landscape has a specific meaning. A smart contract is a few lines of computer code that creates an “if/then” statement, e.g., if Amazon® stock is at $2,000 on January 1, 2019, then sell it. What is special about smart contracts on the blockchain is that once an agreement has been reached by two parties, it is programmed onto the platform and becomes self-executing and immutable – without any human intervention. For example, Ethereum, the first blockchain platform to popularize the idea of the smart contract, permits people to code “if/then” statements onto the blockchain or into a database with ease, allowing for infinite applications.

Clearly, self-executing legal documents will at some point be the norm. This is one of the most significant efficiencies that we will see in the transactional space.

Forum

Early on, legal industry experts saw that blockchain’s smart contract applications alone had the capability to revolutionize how transactional attorneys practice law, dramatically changing how they interact with documents and clients.

Indeed, it may change the way lawyers view their very function. “These systems embed legal logic, require review by legal counsel and raise unique issues around the proper scope of the lawyer’s review versus the engineer’s,” says Joe Dewey, partner at Holland & Knight. “On an ongoing basis, corporate counsel will need to ensure that the systems are updated when necessary to account for changes in law and company policy.”

The Future with Blockchain in the Legal Profession

Besides the revolution in smart contracts, blockchain is already changing many other aspects within the legal industry, such as:

Cryptocurrency and the Tokenization of Assets – The creation of cryptocurrencies like bitcoin, which use the technology to keep track of ownership and trades, is how most people know blockchain. Digital tokens that represent real value or ownership of other tangible assets has become one of blockchain’s most widely watched developments. With companies and others issuing these tokens via Initial Coin Offerings (ICOs) – raising more than $10 billion thus far this year – attention is being paid.

In the future, we could see all assets represented by these tokens, e.g., a car, house or painting, each a store of value represented by a token and making the transactions of leasing, renting or selling that asset far easier. This will have an impact on how we create and distribute wealth, further impacting the legal industry.

Digital Identity – With the 2017 Equifax breach of 160 million individuals’ private data, our Social Security numbers are nearing the end of their usefulness and a newer identifier may be created to replace them.

Recently at an MIT event, an organization named Sovrin described a new world where each of us will have a digital wallet containing all of our private information, including money, health records, log-ins to websites, birth certificate and driver’s license. Behind all of this information will be blockchain, enabled so there will no longer be a central point of breach where millions of people’s information can be exposed at once.

Legal Industry – Many have predicted that most administrative work now completed by law firms will be replaced with blockchain-enabled solutions – and in more specialized legal matters, such as due diligence, blockchain will have a similar oversized impact. Share ownership tables and company records will be transferred onto blockchain, allowing investors, acquirers and third parties to complete their diligence in less than one hour instead of the typical weeks or months. IPO registration offerings could be processed is less than a week instead of the typical six to nine months.

In a similar vein, Holland & Knight’s Dewey sees a significant change to law firms’ back offices. “When a law firm closes a loan for a bank it needs to send over copies of the executed loan documents and other post-closing deliveries… often, this doesn’t happen,” says Dewey. Blockchain, however, would allow the law firm and the bank to share a common repository and tracking functionality, even if different front-end software solutions are used. “The increased efficiency of such a system would be significant and benefit both the firm and the bank.”

Clearly, blockchain is ripe for disrupting nearly every industry going forward, and the practice of law may feel the impact the most. Still, these are early days. Significant infrastructure must be built, and a great deal of legal guidance will be needed.

If there was ever a time to study blockchain technology and embrace it – and the opportunities it will create – the time for the legal industry is now.