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

Non-Fungible Tokens (NFTs): Asset ownership via blockchain rockets into legal

In a two-part series, we will look at Non-Fungible Tokens, explaining what they are and how they will impact numerous industries; and how decentralized finance (DeFi) is critical to understanding NFT’s importance within the legal industry.

Originally published on the Legal Executive Institute.

By Joseph Raczynski

Welcome to the early days of where blockchain goes mainstream, and the legal industry needs to take notice.

While Non-Fungible Tokens (NFTs) have been around for several years — remember CryptoKitties or even the original NFT, called CryptoPunks? Even if you don’t, NFTs have officially exploded into popular culture, begging the question: So, what are they?

A Non-Fungible Token is a token stored on the blockchain, which itself is a secure distributed database with redundancy, immutability, and clarity into tracking data or ownership. A token proves ownership of an asset. For example, a deed to your house is a sign of ownership to that plot of land and building. In the case of the first digital token, Bitcoin, a single Bitcoin is the title of ownership to the underlying value of the Bitcoin.

The best part about a token on the blockchain is the ability to track ownership and therefore authenticity, undeniably proving ownership.

CryptoPunk #7129 Sold for $90,000 recently

Fungible refers to an asset that is easily exchangeable. In the classic example, a dollar is very fungible — you can hand a dollar to me in exchange for some gum, and I can then re-use that dollar for a can of soda. The physical dollar maybe different because I swapped with another in my wallet, but it is easily replaceable and exchangeable, so it is fungible.

Now, it gets interesting. A non-fungible token is a unique token that is not easily exchangeable or replaceable with another. With the mania that is occurring with NFTs, the best example is with art. Recently, Mike Winkelmann, known as @Beeple, a renowned artist who has worked with Nike and Apple, sold 20 pieces of his own work on the digital marketplace Nifty Gateway for a total of $3.5 million. And in the latest eye-opener, he sold a collection of many of his works combined into a masterpiece, titled EVERYDAYS: THE FIRST 5000 DAYS at Christie’s for $69 million. These transactions occurred on Ethereum, the primary blockchain platform of record for storing value, but Winkelmann’s art itself was simply digital images.

With the NFTs, we are proving that rare and scarce representation of things can create value, and that value can be captured on the blockchain. Let your imagination run wild for a moment: What this means is that nearly anything and everything that is represented digitally could also carry provable value.

Would you pay 2.5 million for ownership of Jack Dorsey’s first Tweet?

For example, Jack Dorsey, CEO of Twitter, is in the process of selling his first Tweet, the original Tweet of Twitter. It is, as of this writing, estimated at a value of $2.5 million and projected to go higher. Why might you ask? Well, it is feasible to collect royalties on that tweet once you own it; or, you could hopefully resell it in the future. Lastly — and again, I beg your imagination for this thought — in the not too distant future, with people living in virtual reality, these pieces of art will have a home inside those worlds, too. Other examples, the NBA has now gotten in on the action by leveraging NBA Top Shot, selling limited edition, finite numbers of virtual basketball cards, including a short clip of a LeBron James dunk, which recently sold for more than $200,000.

In the past, I discussed asset tokenization, which is the simple idea that nearly anything could be represented on the blockchain as having value. It this is now happening. This could be a painting, your car, a house, or even a Tweet. Essentially, if you have something original, that you can then prove is yours, that item can derive value.

Through the lens of the legal kaleidoscope, we are entering a complicated but colorful place, and there are an incredible number of areas this will touch. As technology push us to rethink what we know, NFTs shall do the same. In this nascent area, contemplation about the impact on both the practice and business of law will hit multiple fronts. Here are just a few:

  1. Intellectual property — NFTs carry a huge target on their virtual backs from the IP angle. At the heart of these tokens is uniqueness and ownership, and that means that eventually, litigation will follow.
  2. Trust & estates — Possession comes in the form of a digital wallet. Access to the private and public keys will need to be accounted for and administered for these sorts of new assets.
  3. Anti-money laundering — One worry, at the moment, is that the buying and selling of these digital assets could be a way to disguise or launder dirty money. Although the underlining technology of the blockchain is leveraged, a general misunderstanding of its complexity makes it a temporary safe haven for the scofflaw.
  4. Tax & accounting — Millions of dollars are being transferred, soon to be billions; and those in the tax & accounting field will need to better understand this space to assist their clients. How are sales treated? What does appreciation impact? And how can we account for the transactions?

NTFs are likely here to stay. They will continue to evolve, however, representing nearly every assets class going forward. Law firms, corporations, tax & accounting firms, and government agencies will need to pay attention to this space in order to account for how this new technology impacts their individual [digital] pictures of the law.

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

Will COVID-19 Make Cash Obsolete?

Originally published on the Legal Executive Institute.

By Gina Jurva – Joseph Raczynski

Is the COVID-19 pandemic more quickly moving the world to a cashless society? One where almost all financial transactions are not conducted with physical banknotes or coins, but rather through the transfer of digital information via a smartphone?

Thomson Reuters technologist and futurist Joe Raczynski explains why cash may no longer be king and how the fear of banknotes carrying and passing the coronavirus itself may help get us there more immediately.

Legal Executive Institute: The World Health Organization (WHO) recently indicated that washing your hands after handling money, especially if handling or eating food, is a “good hygiene practice” but they stopped short of issuing any formal warnings. How can technology help guide this conversation?

Joe Raczynski: Sooner than we thought, we will be moving away from the possibility of literal dirty money, meaning legal cash tender. Believe it or not, the United States was on the cusp of issuing a digital dollar on at the end of March. As part of the early draft for the COVID-19 stimulus package, bold and powerful policy makers vied for the creation of a Digital Dollar.

Having presented on this topic for the last four years, I was ecstatic to see this development. The concept was to have the US Department of Treasury issue FedAccounts to everyone in the country. Normally, FedAccounts are only issued to qualified banks.

In essence, these accounts would create digital wallets for everyone. Once released, stimulus money could be sent directly to each person in moments. Ultimately, the concerns around logistics and privacy became too significant a barrier, but clearly it is only a matter of time before we have a digital wallet issued by the US government.

Legal Executive Institute: China has taken measures to sanitize their cash. Is this really a path forward for global payment systems?

Joe Raczynski: Yes and no. Multiple news reports claimed that China was burning their paper currency to prevent passing bank notes infected with the virus. Based on the scientific evidence for how long the virus can stay on surfaces, it is logical to reduce the risk by avoiding paper or metal currency.

Fortunately, China had already transitioned to a nearly cashless society. With AliPay and WeChat Pay, nearly everyone in China is using QR Codes to exchange money digitally in person and through digital wallets online. From what I understand, payments via these two platforms make up roughly 80% of all payments in China. That’s huge! The next step will be the People’s Bank of China issuing a Digital Currency Electronic Payment (DCEP) sometime in the next six months. More than likely this will utilize the benefits of blockchain technology — immutable, secure, and transparent.

cash

This last benefit is potentially problematic for the Chinese people. When their digital currency is used, China will have direct insight into the finances of everyone in the country, and beyond, as China’s plan is to roll this out globally, especially in Asia and Africa. The Chinese government has stated that this will help them fend off money laundering, as suspicious transactions can be immediately audited and examined with ease.

Legal Executive Institute: Prior to COVID-19, how close were we to moving to contactless payments?

Joe Raczynski: Most countries in Europe and Asia currently have available some sort of contactless payment system. In the UK and the rest of Europe, the popular payment method is hovering your debit or credit card over the terminal and the payment is processed immediately. They have been doing this for years. The US is just beginning to use the contactless card payment system. Apple Pay, Samsung Pay, Android Pay, all have been around for years now, and are popular with a younger demographic.

With the virus outbreak, more establishments have been pushing for these transactions, which still use banks and credit card processers like Visa, Mastercard, and American Express.

Legal Executive Institute: How feasible it is for retailers use contactless payments as a primary payment method?

Joe Raczynski: We are at a point where most, if not all transactions could be contactless. Many startups, semi-casual restaurants, and small businesses aim to only use contactless payments — for example, like Square does.

Similarly, individuals transacting with others can send money to each other via private bank enabling systems like Zelle, Venmo, Apple Pay, or Google Pay. Clearly credit cards and virtual gift cards have been popular with online merchants for years.

The primary setback for pure contactless and credit card transactions are the unbanked — US adults who do not have a checking, savings, or money market account. According to the Federal Reserve, about 6% of US adults fall into this category.

Legal Executive Institute: Are mobile payments the answer?

Joe Raczynski: Unequivocally yes! Most semi-modern mobile devices have the capability to add credit or debit cards by mapping them to your mobile app payment system of choice. This is a partial solution, for those with access to the banking system, which is the majority in the US. However, to cover all, the idea of the Digital Dollar in a government-issued wallet would be ideal.

Legal Executive Institute: In the US, major mobile payments apps had adoption rates of less than 10%, according to the Pew Research Center. What are the major hurdles for adopting mobile payments as a primary payment method?

Joe Raczynski: While smartphone use is at roughly 81%, according to Pew, the primary hurdle for contactless payment in the US is actually habit. We are accustomed to swiping cards or inserting them into a device for chip reading.

Education is also key — many people are unaware they can hover their card over a payment terminal to do the transaction. (Look for the wireless symbol on your card to see if this is feasible.) Clearly migrating to app-based transaction on your smartphone will grow in popularity too. And with the pandemic, the push to contactless payments is a given.

Legal Executive Institute: What might payments look like in the future, and how can we protect against fraudulent activity?

Joe Raczynski: I honestly believe some dramatic shifts are about to take place with our primary forms of money. With the advent of blockchain technology, there will be a fission between state-sponsored fiat money and privately-run currencies. The philosophical and theoretical concerns, challenges, and opportunities are innumerous, but not insurmountable.

Facebook’s Libra project, for example, is an effort by a private company to issue a global currency. The idea is to create a permissioned blockchain where a set number of trusted participants (100 or so) control the rules and define total circulation of the coin. While Libra has met with significant headwinds, this is very likely our future, in some incarnation. Facebook, or more likely, a large private company outside of the US will succeed here. If Facebook perseveres, it could create a global currency usable by half the world population overnight, which is extremely powerful, albeit a bit threatening to sovereign nations.

What will be fascinating to watch is the push by governments around the world to issue their own digital currency in the next few years to counter the private company coins. According to the International Monetary Fund, 50 countries are now exploring issuing their own digital currency.

The major dilemma for state-sponsored digital money, however, is the question of whether they pursue blind payments or clear payments. That means, will they allow people to use the digital currency like paper currency by concealing private information through cryptography? Or will they wander down the Chinese model and make it all traceable by the government, which would certainly help curtail nefarious transactions but could ebb civil liberties.

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.

Podcast: The Hearing With Kevin Poulter & Joseph Raczynski – Future Legal

Episode 2 of THE HEARING is now live!

In episode 2 of The Hearing Podcast Kevin Poulter speaks to futurist Joseph Raczynski on #legaltech #AI #blockchain and the future of the robot lawyer.

Listen now and subscribe to #thehearingpodcast on:

iTunes – https://tmsnrt.rs/2swyzmz

Spotify – https://tmsnrt.rs/2kOOpVw

SoundCloud – https://tmsnrt.rs/2Js4deI

How to Launch an ICO Token on Ethereum in 90 Minutes

By Joseph Raczynski

So you want to have your own cryptocurrency, eh?  It is surprisingly not too cumbersome to create.  If you have some very basic coding skills, general understand of a digital wallet, and the ability to follow point by point instructions, this should take about 90 minutes.  I will guide you through the process of launching your own token to fund your company, or more than likely simply test how to create an Ethereum (ERC20) token.  I am not responsible for anything that comes from your use of this code or the outlined process.  Use at your own risk.

Recently I was asked to put together a more formal booklet on how someone could technically launch an ICO (Initial Coin Offering) in order to create a blockchain enabled cryptocurrency.  I wrote up all of the various components and loads of caveats around all of the considerations.  In order to do this properly, you should have a full blown business plan, marketing master plan, have sought legal compliance, and a whole host of other services.  To that end, there is a new cottage industry surrounding taking companies through the ICO process.  ICO Box is one such company that specializes in this end to end consulting.

For the sake of this guide, I will walk you through all of the steps to create your first token for your project right here.  Some context, I based this off of my upcoming ICO for DC WiFi as the example.

Part 1: You will need the following:

  • Buy some ETH (if you are new to this, buy it from Coinbase)
  • A text editor for your code modification (Open a Text file on Windows)
  • Download a digital wallet (MetaMask)
  • Easy Compilier (via the web Solidity Remix IDE Compiler)

Part 2: Business Decisions

You shockingly need very little to get started with your token creation.  You will need four pieces of information;  1) Name of the Token, 2) Token Symbol (like a stock ticker), 3) The Token Decimal Places (making the token divisible), and 4) The total number of tokens in circulation.

In short:

  1. Number of Tokens You Will Assume (Will be all of the coins initially)
  2. Total Tokens in Circulation (ranges from 10,000 to 1,000,000,000)
  3. Name of the Token
  4. Token Decimal Places (usually 18 places)
  5. Token Symbol (use three or four letters)

My real example: (see live)

  1. Number of Tokens You Will Assume = 1,000,000,000
  2. Total Tokens in Circulation = 1,000,000,000
  3. Name of the Token = The Joerazz Crypto Token of Greatness 
  4. Token Decimal Places = 18
  5. Token Symbol = JoRa

Part 3: The Contract Coding

Now that you know the basics, copy and paste all of the code below into your your code editor, or a text document.  Simply focus on changing the five facets from above in the red section of code below. 

pragma solidity ^0.4.4;

contract Token {

    /// @return total amount of tokens
    function totalSupply() constant returns (uint256 supply) {}

    /// @param _owner The address from which the balance will be retrieved
    /// @return The balance
    function balanceOf(address _owner) constant returns (uint256 balance) {}

    /// @notice send `_value` token to `_to` from `msg.sender`
    /// @param _to The address of the recipient
    /// @param _value The amount of token to be transferred
    /// @return Whether the transfer was successful or not
    function transfer(address _to, uint256 _value) returns (bool success) {}

    /// @notice send `_value` token to `_to` from `_from` on the condition it is approved by `_from`
    /// @param _from The address of the sender
    /// @param _to The address of the recipient
    /// @param _value The amount of token to be transferred
    /// @return Whether the transfer was successful or not
    function transferFrom(address _from, address _to, uint256 _value) returns (bool success) {}

    /// @notice `msg.sender` approves `_addr` to spend `_value` tokens
    /// @param _spender The address of the account able to transfer the tokens
    /// @param _value The amount of wei to be approved for transfer
    /// @return Whether the approval was successful or not
    function approve(address _spender, uint256 _value) returns (bool success) {}

    /// @param _owner The address of the account owning tokens
    /// @param _spender The address of the account able to transfer the tokens
    /// @return Amount of remaining tokens allowed to spent
    function allowance(address _owner, address _spender) constant returns (uint256 remaining) {}

    event Transfer(address indexed _from, address indexed _to, uint256 _value);
    event Approval(address indexed _owner, address indexed _spender, uint256 _value);
    
}

contract StandardToken is Token {

    function transfer(address _to, uint256 _value) returns (bool success) {
        //Default assumes totalSupply can't be over max (2^256 - 1).
        //If your token leaves out totalSupply and can issue more tokens as time goes on, you need to check if it doesn't wrap.
        //Replace the if with this one instead.
        //if (balances[msg.sender] >= _value && balances[_to] + _value > balances[_to]) {
        if (balances[msg.sender] >= _value && _value > 0) {
            balances[msg.sender] -= _value;
            balances[_to] += _value;
            Transfer(msg.sender, _to, _value);
            return true;
        } else { return false; }
    }

    function transferFrom(address _from, address _to, uint256 _value) returns (bool success) {
        //same as above. Replace this line with the following if you want to protect against wrapping uints.
        //if (balances[_from] >= _value && allowed[_from][msg.sender] >= _value && balances[_to] + _value > balances[_to]) {
        if (balances[_from] >= _value && allowed[_from][msg.sender] >= _value && _value > 0) {
            balances[_to] += _value;
            balances[_from] -= _value;
            allowed[_from][msg.sender] -= _value;
            Transfer(_from, _to, _value);
            return true;
        } else { return false; }
    }

    function balanceOf(address _owner) constant returns (uint256 balance) {
        return balances[_owner];
    }

    function approve(address _spender, uint256 _value) returns (bool success) {
        allowed[msg.sender][_spender] = _value;
        Approval(msg.sender, _spender, _value);
        return true;
    }

    function allowance(address _owner, address _spender) constant returns (uint256 remaining) {
      return allowed[_owner][_spender];
    }

    mapping (address => uint256) balances;
    mapping (address => mapping (address => uint256)) allowed;
    uint256 public totalSupply;
}


//name this contract whatever you'd like
contract ERC20Token is StandardToken {

    function () {
        //if ether is sent to this address, send it back.
        throw;
    }

    /* Public variables of the token */

    /*
    NOTE:
    The following variables are OPTIONAL vanities. One does not have to include them.
    They allow one to customise the token contract & in no way influences the core functionality.
    Some wallets/interfaces might not even bother to look at this information.
    */
    string public name;                   //fancy name: eg Simon Bucks
    uint8 public decimals;                //How many decimals to show. ie. There could 1000 base units with 3 decimals. Meaning 0.980 SBX = 980 base units. It's like comparing 1 wei to 1 ether.
    string public symbol;                 //An identifier: eg SBX
    string public version = 'H1.0';       //human 0.1 standard. Just an arbitrary versioning scheme.

//
// THIS IS WHAT YOU NEED TO DO - CHANGE THE BELOW TO REFLECT YOUR CHOICES FROM WHAT YOU CHOOSE ABOVE IN RED
//

//make sure this function name matches the contract name above. So if you're token is called TutorialToken, make sure the //contract name above is also TutorialToken instead of ERC20Token

    function ERC20Token(
        ) {
        balances[msg.sender] = NUMBER_OF_TOKENS_HERE;               // Give the creator all initial tokens (100000 for example)
        totalSupply = NUMBER_OF_TOKENS_HERE;                        // Update total supply (100000 for example)
        name = "NAME OF YOUR TOKEN HERE";                                   // Set the name for display purposes
        decimals = 0;                            // Amount of decimals for display purposes
        symbol = "SYM";                               // Set the symbol for display purposes
    }

    /* Approves and then calls the receiving contract */
    function approveAndCall(address _spender, uint256 _value, bytes _extraData) returns (bool success) {
        allowed[msg.sender][_spender] = _value;
        Approval(msg.sender, _spender, _value);

        //call the receiveApproval function on the contract you want to be notified. This crafts the function signature manually so one doesn't have to include a contract in here just for this.
        //receiveApproval(address _from, uint256 _value, address _tokenContract, bytes _extraData)
        //it is assumed that when does this that the call *should* succeed, otherwise one would use vanilla approve instead.
        if(!_spender.call(bytes4(bytes32(sha3("receiveApproval(address,uint256,address,bytes)"))), msg.sender, _value, this, _extraData)) { throw; }
        return true;
    }
}

This code is from the good people at Code-Factory.  You can see if they have any newer code here. The above code is displayed in three parts, combined into one section for ease here.  The code is from February of 2017, v 0.4.4.

When you are filling in the four fields, one funky aspect that you will want to pay attention to is the decimal portion.  Examples: If I wish to create 1,000,000,000 billion tokens and I want 18 decimal points, then I have to add 18 zeros onto the 1 billion number.  This number is added to two fields in your code.  So for 1 billion coins with 18 decimals point would look like 1000000000000000000000000000 and do not add commas to your code.  Another example, if you do not want any decimal points then you would not add any extra zeros.  Last example on this, if you want 8 decimal points, you would add 8 zeros to the 1,000,000,000 billion so it would look like 100000000000000000.  Most cryptocurrencies have 18 decimals.

  • Number of Tokens You Will Assume = 1000000000000000000000000000
  • Total Tokens in Circulation = 1000000000000000000000000000

Part 4: Testing via Ropsten Test Net

It is time to take your modified code – all four lines – and test it out.  You could test this in Ethereum’s live environment, but that would be a waste of money (a few dollars up to $8) for each time it doesn’t work.  So make sure you are on the TestNet of Metamask.

Download MetaMask Chrome plugin.  This is a digital wallet which can store Ethereum bmetamaskased tokens (ERC20), like the one you are going to make.  You can also deploy smart contracts via this robust little app.  MyEtherWallet, is also another option, but for this overview, I am using MetaMask for ease.

 

 

 

When you create any digital wallet, the seed (a bunch of random words) is something that you will want to take the utmost care around securing.  If you lose these words (essentially your password) you will lose complete access to your wallet on the blockchain and there is no way to recover this – none.  So keep it safe and secure – preferably offline.

The next step is to drop your doctored code into a compiler, which reviews the code for errors, identifies code that could be better defined, and then publishes that code directly to Ethereum’s blockchain.  Click on Solidity Remix IDE Compiler and copy and paste the code you modified in your text editor into the compiler.

Open your MetaMask wallet, which should be a tiny icon on the upper right corner of Chrome.  When it is open, make sure you change the network to “Ropsten TestNet” by clicking the little arrow.

testnet

Once you do this, you will need to add fake ETH to the TestNet.  Since this is a test network, you get free fake ETH from the network, but you have to request it.  If you don’t have any of the foe ETH, you will not be able to send your contract to the blockchain.

code

If you get a bunch of yellow errors in the right panel, don’t worry, these are cautionary and not fatal.  It may look like this.  Again, it should pose any problems.

errors

Next you will need to go to the actual version of the compilier and make sure you are not using a “nightly” version.  It defaults to the correct version for me, but just make sure it does not say “nightly”.  The arrow drop down is where you can change the version, if necessary.  Make sure you write down which version you choose, as you will need this later.

version

Now head back to to the “Run” tab on the same screen and click “Create”.  What is fascinating is that the compiler automatically connects to your MetaMask Wallet in your browser to create the contract.  As previously mentioned, more then likely the first time you do this you will have to request or add fake ETH to the TestNet.  Since this is a test network, you get free fake ETH from the network, but you have to request it.  If you don’t have any of the foe ETH, you will not be able to send your contract to the blockchain.  This sometimes take a bit of finagling.

So below, click “create” and the MetaMask wallet will pop up over your browser.  As mentioned, if you don’t have any fake ETH, will ask you to generate them – request 1 ETH.

run

Click “Submit” to generate the contract.

confirmcontract

Now click on the date listed below and it will take you to the live generation of the contract via Etherscan.

wallet confirm

If all went well, you will see something like the below.  A green check is great.

success

If you made it this far, now it’s time to load your tokens into your wallet.

Part 5: Loading New Token in Your Wallet

contract

Grab (copy) your contract address which will be different than what you see above and go to MetaMask.  Click “Add Token”

tokenadd

You should see the following where you enter your Contract Address which you copied from Etherscan.  Also add the Token Symbol and Decimals and click “Add”.

token18

There you go!  It should be added to the list.  I have 1 billion JORA tokens now.

listoftokens

Part 6: Verify Your Code

One item, which is not essential, but shows that you are not too shady is verifying the code you used.

On the Etherscan page, where you have the contract ID, click on that link.

contract

Then on the following page look for the “Contract Code” tab and click “Verify And Publish”

proof

The next screen will look like this with the contract ID already populated.  You need to fill in the “Contract Name” with “ERC20TOKEN”, then select the correct “Compilier” – make sure it is the same version you wrote down earlier which is not the “nightly” and change “Optimization” to “No”.  Then copy and paste the whole section of code from the compilier into the big text box.  Forget all of the other parts and click “Verify” at the very bottom of the page.

verify2

Now if that all worked, you should get the following:

finalconfirm

If that all worked, you are good to go!  The next part is actually doing on the real official Ethereum blockchain.

Part 7: Launch Your Token on Prod

Now simply go through the same process by on the live Main Network site.  So go to MetaMask and hit the drop-down box and change it to “Main Network”.

mainnet

Now go through Part 4 – 8.  You will need ETH for this final stage.

Part 8: Verification:

If you want to be verified, look to do so by filling in the following information on Etherscan.  This is vetted by the organization so you do need this to be approved for this portion.

To update your ERC20 token information please provide us with the following information:

Firstly, check that your token contract source code has been verified.

1. Contract Address: 0xd5XXXXXXXXXXXXXXXXXXXXXXXXX

2. Official Site URL:

3. Link to download a 28x28png icon logo:

4. Official Contact Email Address:

5. Link to blog (optional):

6. Link to reddit (optional):

7. Link to slack (optional):

8. Link to facebook (optional):

9. Link to twitter (optional):

10. Link to bitcointalk (optional):

11. Link to github (optional):

12. Link to telegram (optional):

13. Link to whitepaper (optional):

14. CoinMarketCap Link (PriceData):

 

That is it!  Please let me know how this goes for you.

 

 

Reference @maxnachamkin