Tsoma Nakamoto speaking at Georgetown University Law Center on 10 November 2017
On 10 November 2017, an eager crowd packed into
Georgetown University Law Center to hear from experts in one of the hottest
technology fields, cryptocurrency. Friday’s event, the first in an ongoing
Cryptocurrency Speaker Series, featured Tsoma
Nakamoto, Bitcoin venture capitalist, and Ryan
Lester, founder and CEO of Cyph, an encrypted messaging platform.
Sponsored by the Cyberlaw Society, Georgetown International Law Society, and
Society for the Cessation of Tobacco Death, last week’s event drew a strong
crowd, indicating significant public interest in this developing technology.
Mr. Nakamoto - who shares a last name, but
apparently no relation, to the rumored inventor of Bitcoin, Satoshi
Nakamoto - began the evening with an overview of cryptocurrency
technology. Framing new currencies such as Bitcoin as the next evolution of
ledger technology, Mr. Nakamato suggested currencies like bitcoin are merely a
more technologically advanced solution than the double spend problem of
recording transactions that humans historically solved through seashells or
stone tablets. Now, currencies such as Bitcoin, Ethereum, and Polkadot, include
the complete transaction history of a currency unit in a distributed ledger,
preventing both forged currency and currency double use.
His comments, however, alluded to the sometimes
volatile nature of cryptocurrency technology. In addition to market volatility
(evidenced by this past weekend’s sharp drop in Bitcoin prices),
Mr. Nakamoto expounded on the new currencies’ technological volatility.
Obstacles to a stable currency include technological mishaps, such as the bug that locked up $300 million worth of
cryptocurrency last month, and targeted attacks on the markets such as the Mt.
Gox hack, which Mr. Nakamoto said wiped out half his holdings.
Cryptocurrencies also may soon face legal obstacles to ensure compliance with
SEC regulations, and Mr. Nakamato believes assets bought in future ICOs
(initial coin offerings, the cryptocurrency equivalent of an IPO) will be
subject to the capital gains tax. Mr. Nakamato’s view regarding SEC enforcement
is supported by the July
2017 Investor Bulletin issued by the SEC, which alerted investors that
currencies issued through ICOs may be securities, falling within the purview of
SEC regulation. The September
2017 arrest of Maksim Zaslavsky for selling unregistered securities in ICOs
further suggests increased regulation of cryptocurrencies.
Looking forward, Mr. Nakamoto believes that the
future of blockchain technology will move towards eco-friendly algorithms due
to the severe environmental costs of these transactions. In fact, a recent report indicated that a single bitcoin
transaction uses as much energy as a house uses in a week. Mr. Nakamoto posited
‘holochains,’ which contain data stored on a holographic image, as a possible
solution to environmental concerns.
Ryan Lester continued the evening with an
overview of his new secure messaging program, Cyph. Growing out of his use of
‘off-the-record’ encrypted chat to communicate with his friend and co-founder, Josh
Boehm, Cyph aims to provide users with the security of encrypted
chat and the easy user experience of popular messaging applications such as
Gchat or iMessage. After the Snowden leaks, Mr. Lester realized encrypted chat
services could have broader appeal beyond niche tech-sector users.
Mr. Lester is poised to scale Cyph for greater
public use in the near future. In addition to presenting his work on Cyph at
prominent conferences such as Defcon and Blackhat, Mr. Lester will release the
full version of Cyph in the near future. He evaded questions about any IPO,
stating he wanted to retain control over the company for at least the next few
years. Mr. Lester ended his lecture with a call for sensible encryption
regulations, telling his law school audience to work towards a future with
greater privacy protections for consumers.
The large turnout for this event indicates
strong interest among the legal and greater Washington community for
information on these developing technologies. For those interested, keep an eye
out for announcements regarding the next event in the Cryptocurrency Speaker
Series.
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