Above: Exposed Order by Eugene Wood, 2016
Blockchain has been hailed as a revolutionary technology that will dramatically transform society for the better; a cryptographic near-panacea that addresses inequality, disenfranchisement and the many ills of centralised systems—financial and otherwise.
Within a decade or so, the best-known blockchain product, cryptocurrency, has seen values rocket and crash repeatedly. The spectres of fraud and crime are never far from crypto’s door. At least one major digital currency exchange has been left a smouldering wreck. Can there be life in the young pup yet?
The early days of distributed ledger tech flew by in a flurry of entrepreneurial excitement. Would-be founders, many of them idealistic and inexperienced when it came to business, rushed head-long into a heaving market. Each wanted to be the first to set up shop and become the biggest kid on the block. Wily venture capitalists goaded on ‘disruptive’ personalities. Our crypto heroes were in a spectacular hurry. Mistakes were made.
Companies launched technology without fully understanding its capabilities or limitations. Regulators sweated to keep up with the sector’s preternatural growth. Self-regulation became the watchword. This has on many occasions been lax, thus tarnishing the industry’s reputation.
This, you have to admit, is human. Bear in mind the novelty of both the technology and the industry built upon it. Give an excitable young driver an experimental rocket car, remove any restrictions or speed limits, and point him towards a distant horizon: what happens? Well, in his excitement, he might run a red light or two.
The crypto sector is now showing signs of maturity. Blockchain leaders are sounding off sensibly about improving internal controls and self-regulating responsibly. The long-term financial viability of their projects is finally coming into more serious consideration.
Meanwhile, online business grows and grows, both in quantity and quality. For this to continue, methods of establishing trust between the near-anonymous parties of e-commerce must evolve. Distributed ledgers hold that promise. But if the world still cries out for the irreverent entrepreneurs of decentralisation, what the crypto bros need are cooler heads and more prudent advice.
Imagine this: You get wind of an opportunity to purchase property abroad. It’s at an unbeatable price in a hard-to-reach but resource-rich corner of the globe, so that it’s bound to increase in value, or offer a secure bolt-hole for retirement.
Now, if this distant jurisdiction were to recognise non-fungible tokens (NFTs), a sort of digital deed, as proof of ownership, you could buy the land from where you’re sitting right now by means of a simple crypto transfer.
This seems feasible, at least to a tech layman such as myself. But an NFT-based conveyance is bound to face legal hurdles, right? Well, that would depend. A smaller nation could gain big from accommodating such a transaction, while having the necessary agility for reform of its land law; a nation like the Republic of Georgia.
Back in 2016, Georgia’s National Agency of Public Registry agreed on a project to register land titles on blockchain. With the help of Bitcoin mining company BitFury and renowned Peruvian economist Hernando DeSoto, the former socialist state became the first ever country to use the technology in this way.
Two years later, claims one Harvard paper, 1.5 million Georgian land titles were published on the blockchain, ensuring the security and immutability of the data. Certainly, there is broad agreement that Georgia’s land registry has become much more efficient, already hailed by the World Bank as one of the world’s quickest and cheapest. However some experts argue that those efficiencies result from political reform, while others question whether the land registry can be properly considered blockchain-based.
At any rate, we may be seeing the beginnings of a proprietary sea-change in the Caucasus, something which is bound to be met with frowns from lawyers and regulators protective of their turf. Critics, both the wary and the simply mean, may decry a Ponzi or warn of a money-laundering paradise in the making.
Without a doubt, the risk of enabling fraudsters and criminals is real (as in any area and at every level of finance). But perhaps what really scares the status quo is the threat to conventional modes of commerce. Yet no amount of regulation can, or should, prevent change.
What’s needed is change in the spirit of doing some good. We can get sound guidance in contemporary matters from ancient sources. We can pay heed to the law and the claims of existing systems. We need leaders with a little gravitas; people less interested in a quick buck and just glad to build something that lasts.
Blockchain’s not going away. Those who want to use this technology as a way to secure not just their own future, but that of their family, friends and community, will succeed. They will just need to chain together some lawyers, financiers and consultants worth their salt to negotiate, fund, plan and talk blocks to vested interests. Then who knows what can be built?
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Ciarán is a lawyer-linguist, advisor to a TIME100 Most Influential company and World Finance Forum speaker, as well as an associate of the trail-blazing Swiss digital firm, Naray Law. His opinion appears in the EUobserver and he has been cited in the University of Illinois Chicago’s Review of Intellectual Property Law and Wikipedia. He is author of the seminal essay, ‘Metalaw: The Law Of The Metaverse’. Reach him via LinkedIn, Twitter and Naray Law: https://www.naray.law/en/contact/
Co-author Joaquin Moreno Antuña is a Chartered Public Accountant and data analyst with a PhD in finance. He is a successful entrepreneur who has raised over 1 billion EUR for more than 120 projects across several industries including fintech, leading to an appearence in Forbes. He is Professor of Administration and Finance at Uruguay’s largest private university, ORT, and a leading member of the Partido Digital, the first digital political party to participate in a national election.
