Blockchain & Crypto Law
What is Blockchain?
A blockchain is a distributed database or ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.
What is Cryptocurrency?
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
The Brief, Brief History of Blockchain Technology
The history of blockchain doesn't go back very far. But it does go back to the early 1990s when a pair of physicists, Stuart Haber and W Scott Stornetta, were trying to solve a big problem, how to keep the past secure, and keep digital information safe and resistant to tampering?
In 1991, they published the first paper to outline the use of a chain of cryptographically secured blocks to preserve the integrity of past information and protect it. They had no idea at the time that ideas presented could be used to be formed new currencies or build the ecosystems that we see flourishing today.
In 1993, in response to the proliferation of spam and other network abuses, the concept of proof-of-work was established, that sought to provide countermeasures to those.
It wasn't until 2008 that what we know today as blockchain was established, when the world was introduced to an individual or perhaps a group named Satoshi Nakamoto, the shadowy central figure in the story of Bitcoin.
It was in 2008 that Nakamoto released a seminal whitepaper that ushered in the age of blockchain. The paper was called Bitcoin: A Peer-to-Peer Electronic Cash System. This is the paper that technically defined central aspects of the most commonly known blockchain of today, Bitcoin. This knowledge is so common that some people think Bitcoin is the blockchain, and that the terms are interchangeable. They aren't.
2014, enter Ethereum. Ethereum's key innovation is that it is much more than just a currency or a record of transactions. It's specification can actually run computation. Called the Ethereum Virtual Machine, or the world computer, the EVM allows for what are called smart contracts, or programs that can be deployed onto the blockchain, letting developers create decentralized applications that are housed, distributed on the chain itself.
By 2015, Bitcoin had started to get serious attention. And by 2016, blockchain really hit is stride in the financial industry. In 2017, the Harvard Business Review suggested blockchain as a foundational technology. Today, there is a robust and fast growing ecosystem surrounding blockchain, and the momentum is only growing towards a decentralized future.
Understanding Cryptocurrencies
Cryptocurrencies are digital or virtual currencies underpinned by cryptographic systems. They enable secure online payments without the use of third-party intermediaries. "Crypto" refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.
Cryptocurrencies can be mined or purchased from cryptocurrency exchanges. Not all e-commerce sites allow purchases using cryptocurrencies. In fact, cryptocurrencies, even popular ones like Bitcoin, are hardly used for retail transactions. However, the skyrocketing value of cryptocurrencies has made them popular as trading instruments. To a limited extent, they are also used for cross-border transfers.
Blockchain Is Related to Cryptocurrency, but Is Not a Cryptocurrency
Central to the appeal and functionality of Bitcoin and other cryptocurrencies is blockchain technology. As its name indicates, blockchain is essentially a set of connected blocks or an online ledger. Each block contains a set of transactions that have been independently verified by each member of the network.
Every new block generated must be verified by each node before being confirmed, making it almost impossible to forge transaction histories. The contents of the online ledger must be agreed upon by the entire network of an individual node, or computer maintaining a copy of the ledger.
Experts say that blockchain technology can serve multiple industries, such as supply chains, and processes such as online voting and crowdfunding. Financial institutions such as JPMorgan Chase & Co. (JPM) are testing the use of blockchain technology to lower transaction costs by streamlining payment processing.
Blockchain & Crypto Attorney
TorVal Law Group recognizes the need and expertise in innovative technologies that are rapidly emerging and developing all around the world.
As an innovative thought leader in the blockchain and cryptocurrency realm, TorVal Law Group is a pioneer law firm in Houston, Texas that offers legal and regulatory guidance in Blockchain technology.
Today, the regulatory landscape surrounding Blockchain and virtual currency activities is quite complex due to the principle of decentralization which is the foundation of these new technologies. As such, the rapidly evolving regulatory landscape can become a nightmare from a legal standpoint for companies or individuals that are at the forefront of these emerging technologies.
TorVal Law Group is dedicated to staying at the forefront from a legal perspective as these emerging technologies continue to revolutionize social and economic activities.
The founder of TorVal Law Group, J. Luis Torres, started mining bitcoin with his home computer back in 2013 while he was studying for the LSAT. This is when his keen interest and fascination with blockchain technology originated.
Mr. Torres has personal experience with creating and minting NFTs, mining cryptocurrency, buying virtual real estate, and even publishing Web 3.0 domains. This very website was created, integrated and published in Web 3.0 by embracing blockchain technology.
Most importantly, Mr. Torres has been Certified as a Blockchain & Law Professional by the Blockchain Council.
TorVal Law Group not only understands the tax, regulatory, and other legal issues associated with blockchain technology and cryptocurrency, but also and perhaps most importantly, understands this underlying technology from personal experience.
TorVal Legal Consulting and Guidance in Blockchain and Cryptocurrency Compliance
We provide compliance and defense representation for all matters involving blockchain technology and cryptocurrency. Regardless of your specific needs, if you are in need of legal advice or representation, we encourage you to contact us to learn what we can do to help.
Some examples of our services in the areas of blockchain and cryptocurrency compliance and defense include:
Compliance Representation
On the compliance side, we help entrepreneurs, investors, and companies avoid federal statutory and regulatory violations and mitigate other liability risks through the implementation of comprehensive policies and procedures, effective contract drafting and negotiation, and ongoing advice and representation.
We provide these compliance services in the areas of:
Blockchain Technology – For blockchain technology companies, we assist with navigation of the complicated, de-centralized, and rapidly-expanding federal regulatory regime. We help company owners and executives make smart decisions, and we offer solutions that are flexible enough to adapt to blockchain companies’ rapidly evolving legal obligations.
Smart Contracts – Smart contracts have evolved quickly, but there is still a long way to go before they gain mainstream acceptance. We help companies create and utilize smart contracts supported by blockchain technology, and we represent our clients in federal regulatory matters when necessary.
Cryptocurrency Mining – Cryptocurrency mining is a fundamental component of the expansion of blockchain, and it remains subject to close scrutiny at the federal level. Mining, especially on a large scale, potentially presents a host of legal and regulatory issues, and miners must ensure that their operations are fully compliant in order to avoid unwanted scrutiny.
Cryptocurrency Transactions – We advise and represent investors and companies with respect to all aspects of all types of cryptocurrency transactions. From cross-border issues to federal income tax implications, we help our clients see the complete picture so that they can make informed decisions.
Cryptocurrency Forks, Halving, and Other Issues – Forks, halving, and other cryptocurrency events can present compliance concerns for cryptocurrency companies, exchanges, investors, and others. Here, too, we help our clients understand their obligations and make informed decisions focused on avoiding triggers for federal investigations.
General Corporate and Tax Compliance – When establishing or running a blockchain company, cryptocurrency company, or other business that utilizes blockchain technology or digital currency, it is imperative to maintain general corporate and tax compliance as well. In addition to representing clients with regard to blockchain-specific compliance matters, we also provide comprehensive general corporate compliance representation.