Billionaire entrepreneur Richard Branson says that Bitcoin is going to solve all of humanity’s problems. Jamie Dimon, CEO of JP Morgan Chase, called Bitcoin a fraud.
I turned to attorney Marta Belcher—a pioneer in the area of blockchain law—to demystify cryptocurrency and to share her insights on the implications of of blockchain on leadership and organizational structure.
Belcher is an attorney focusing on blockchain and emerging technologies at Ropes & Gray. She has spoken about blockchain law around the world, including presenting twice in Davos during the World Economic Forum, testifying before the New York Senate, and speaking in European Parliament, the OECD, and U.S. Congress.
Belcher serves as outside general counsel for one of the largest cryptocurrency projects, defended one of the first patent litigations against a blockchain company, and was recognized by the Financial Times Innovative Lawyer awards for her pioneering work on the first blockchain-transferable software license. She also represents major blockchain industry groups and civil liberties organizations in matters relating to blockchain and public policy.
Q: Could you explain Bitcoin simply?
Marta Belcher: Think of Bitcoin as doing for value what the Internet did for information. You can send a digital file to the other side of the world instantly, so why can’t you send money that way, too? Before Bitcoin, if I wanted to send money to you digitally, the process would be something like this: I go to my bank. My bank updates its ledger to subtract money from my account. My bank communicates with your bank using 1970s ACH technology. And, finally, your bank updates its ledger to add money to your account. That takes a lot of time and expense and requires that we trust our banks.
The idea behind Bitcoin was this: what if instead we have a single, shared, public ledger that permanently records every transaction, and that ledger is not maintained by a single entity but rather by many computers working together. That ledger is called a “blockchain.”
Q: Is Bitcoin here to stay?
Belcher: Yes. The thing is that even if, say, a government wanted to shut down Bitcoin, there is no “Bitcoin Corporation” to shut down. Bitcoin is decentralized—it is computer code running on thousands of computers around the world. That makes it extremely interesting from a legal perspective. Whether the price of Bitcoin will go up or down is less interesting, at least to lawyers.
Q: What is the most exciting thing about this technology?
Belcher: Being able to program money. You can write computer programs that automatically transfer cryptocurrency when something happens—“if x happens, transfer y amount of money.” For example, you could write computer code that automatically transfers a millionth of a cent to a singer for every second of the musician’s song that you listen to. These computer programs are called “smart contracts,” but I prefer to think of it like “programmable money.”
Q: What is a common myth about blockchain and cryptocurrency?
Belcher: People sometimes called for a ban on cryptocurrency because it can be used to commit crimes. It is true that some cryptocurrencies allow for greater anonymity (since transactions are recorded using a “public key”—like a username—instead of real names). But the fact that a technology could be used to break the law doesn’t mean it should be banned. We don’t call for a ban on cash because criminals use it to commit crimes, and we don’t blame Ford when one of its cars is used as a getaway vehicle in a bank robbery.
Q: You’ve been serving as outside general counsel for a blockchain company and advise many other blockchain-focused organizations. What have you noticed about leaders in those companies?
Belcher: Leaders of blockchain companies really understand and believe in the power of decentralization. And they really do implement those ideas. Some of these companies don’t have offices, have employees all over the world, and heavily rely on tools like GitHub and Slack for asynchronous communication. They also deeply believe in the ideals of open source software. They aren’t looking to make money through ownership of their inventions; they care about adding value to the ecosystem and to the world.
Q: So how could blockchain change leadership?
Belcher: There are these so-called decentralized autonomous organizations that are absolutely fascinating. We were just talking about being able to program your money; now, imagine writing a computer program where a bunch of people contribute money and the program automatically distributes those funds based on how the contributors vote—like an automated venture capital fund. That was the model of the first of these decentralized autonomous organizations in 2016. Suddenly you can have leaderless organizations governed entirely by computer code—a pretty radical change from traditional organizational structures. And that may be scary, but it also raises some fascinating legal questions that I can’t wait to try to answer.