Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698061144456.pdf (Liberia)
The Blockchain: Beyond Bitcoin A data innovation case study by Blockchain technology is the distributed database that underlies digital cryptocurrencies such as Bitcoin.

Various consensus algorithms can create distributed ledger systems to achieve a verifiable public record of transactions, replacing trust in people or institutions with a trust in mathematics.
All of these technologies provide an extremely useful solution for keeping a reliable record of digital information — a practical answer to the theoretical conundrum known as the Byzantine Generals Problem.

Keeping track of digital tokens in order to prevent double-spending is the most obvious application, but blockchain technologies allow for any kind of transaction without a requirement for a trusted third party, intermediaries or centralized authority.
Hundreds of digital currencies based on blockchain technol- ogies are valued in the billions of dollars with over 100,000 merchants accepting bitcoins, but the applications extend beyond digital cash.

IMPACT Bitcoin as a currency is only the first application for blockchain technologies, the proof of the concept that shows valuable information can be reliably stored in a digital system scattered all over the world.
The blockchain acts as a registrar of deeds, recording and verifying the ownership of assets.

The innovation is the technological shift away from human-based verification to algorithmic trust that reduces the costs of transactions and boosts economic efficiency and wealth.

As hundreds of billions of devices connect to the internet, a secure communications platform to ensure trusted soft- ware updates and the absence of malware could rely on blockchain technologies.
The “internet of things” (IoT) will need a low-cost network that can autonomously maintain itself without the need for human intervention.

Just as the tele- phone system became more efficient and affordable when human switchboard operators were replaced by automation, employing blockchain technology to secure machine-to-machine communications will make smart appliances more widespread and convenient, enabling sharing economies and other efficient markets.
PUBLISHED MARCH 2015 BY THE COPIA INSTITUTEThis work is dedicated to the public domain.

Smart contracts are poised to become innovative le- ment Network (FinCEN) allows services that exchange gal and financial instruments, offering services that can’t traditional currencies with bitcoin to operate as Money be done as efficiently without the automated execution Services Businesses (MSBs), but such businesses would of terms.
Escrow services for any-sized transaction be- be required to register and be regulated under the Bank come more attractive — for buying small items on Craig- Secrecy Act.

Obtaining licenses to operate and ensuring slist or other online marketplaces — instead of being that legal obligations are met will undoubtedly take sig- used only for large expenses such as cars and homes.
nificant time and development efforts, and the guide- Smart insurance contracts would automatically distrib- lines could expand to cover more types of transactions ute assets upon a person’s death, reducing possible in the future — adding uncertainty for businesses that disputes over wills and inheritances.

There are already previously considered themselves unregulated.
car loans that disable a car if a payment is missed, and The state of New York is drafting its own rules for smart property would aim to reduce theft or unauthorized uses.

Busi- ness transactions can be programmed to dis- tribute equity or voting rights, and companies will be able to more eas- ily raise funds from a large crowd of investors with minimal fees to en- able the transaction.
The rise of Decentralized Au- tonomous Organizations (DAOs) will allow for the creation of entities that wouldn’t normally exist, such as organizations funded with micropay- ments or set up with ex- tremely complex owner- Using bitcoin as money is outlawed in three countries: Russia, Vietnam, and Iceland.

BitLicense regulations, and other states are expected to follow suit.
However, even just op- erating within the US right now, often re- quires understanding (and trying to comply with) banking regula- tions in all 50 states.

Individuals don’t need to be too con- cerned about licenses or registering to use blockchain technolo- gies for uses unrelated to currencies, as ex- emptions for software developers using block- chain protocols for non-financial purposes ship and management structures.

are expected to be widely accepted.


However, this is POLICY IMPLICATIONS new territory for regulation, and it’s possible that the underlying algorithms for blockchain technology could Using bitcoin as money is outlawed in three countries: be subject to international trade embargoes or other Russia, Vietnam, and Iceland.

This doesn’t necessarily restrictions.


Potentially, blockchain platforms for mes- prevent users from storing the digital information or saging and communications could be subject to laws running programs using bitcoin code, but for these na- regulating encryption technologies.

tions, these laws effectively slow the widespread adop- As the blockchain can be more widely used, it starts tion of cryptocurrencies and associated services with a to create a variety of other policy challenges as well.
chilling effect.

In the US, the Financial Crimes Enforce- Regulations are built on the expectation of a world in PUBLISHED MARCH 2015 BY THE COPIA INSTITUTEThis work is dedicated to the public domain.

which money is generally heavily regulated by government entities, rather than algorithms and cryptography.

Similarly things like enforcing contracts and insurance have their own legal/judicial and regulatory infrastructure that are based on humans adjudicating issues.
When things are handled algorithmically instead, it could have a major impact on both that infrastructure and how such contracts are made and enforced.

There are also concerns about law enforcement.

Certainly a significant number of “dark market” transactions for il- legal products are happening with cryptocurrencies today, leading to concerns about how law enforcement can track down lawbreakers.
Beyond currency and contracts, the blockchain’s ability to reliably record information has many exploring how it could be used to revolutionize voting systems as well, potentially building much more secure, reliable and trustable voting systems that are nearly impossible to corrupt.

On top of that, some envision a world in which blockchains enable truly distributed online services, that have no central point of attack, or central point of failure.
This could create significant regulatory questions, including how to categorize services that simply aren’t based anywhere — unlike today, where, at the very least, key servers must exist somewhere.

This creates challenging questions about which regulatory regimes apply — and a variety of other questions regarding freedom of expression, defamation, copyright and more.

PUBLISHED MARCH 2015 BY THE COPIA INSTITUTEThis work is dedicated to the public domain.