Addison Cameron-Huff, Blockchain Lawyer

A few weeks ago, the C.D. Howe Institute in Toronto wrote a commentary on stablecoins created by central banks, specifically the Bank of Canada: https://www.cdhowe.org/public-policy-research/two-sides-same-coin-why-stablecoins-and-central-bank-digital-currency-have. The report is called “Two Sides of the Same Coin: Why Stablecoins and a Central Bank Digital Currency Have a Future Together”. This commentary is a great opportunity to explore differences in opinion on this issue because C.D. Howe's works is quite good, and independent.

One of the authors of the commentary, Mark Zelmer, is the former Deputy Superintendent of OSFI. The excellence of the authors is a great reason to look at this report critically. The commentary contains a number of premises that are worth challenging, and conclusions that are far less definite than the commentary makes them out to be. This has implications for governments, like Canada's, that are trying to grapple with modernizing their money systems during the "Great Digitization" (i.e. now). It also has profound implications for Canadians, who may soon be using a new type of money.

Cryptocurrency is often referred to as “unregulated” or “the Wild West” but neither of these labels are accurate. Before getting into why it's wrong, what does “regulation” even mean? If we don't agree on what it means to be “regulated” vs. “unregulated” then there's no way to discuss whether cryptocurrency is the Wild West or not.

The Meaning Of Regulation In Canada

There are strong arguments against cryptocurrency. Just like there are strong criticisms that can be leveled at Amazon or a favourite programming language - nothing in life is just upside. Below I've tried to capture some of what I regard as the best criticisms, which are: energy use, e-waste, gambling, scams, security, and uncertain regulation.

“Why cryptocurrency?” Why have millions of people taken up buying it, using it, and building with it? This blog post lists key features that I've found noteworthy and caused me to learn something about systems that don't involve digital assets. I've grouped the features according to the barrier that they help overcome.

A. Barriers To Participation

Here are 54 ideas I've jotted down in my phone over the last couple years as business ideas. Some are good ideas and others aren't, but they might be food for thought that leads you to a great business concept.

Law

Law firms generate large amounts of quality legal content that's often hard to find. They're not always the best at search engine optimization and the content is often not really designed to be easily consumed (it's for a niche audience). One of the main purposes of this content is to show who knows what they're talking about, because it's better to have an article showing that than a brief line in the bio of a lawyer saying it. But how can someone find which lawyers are good at what? How can that content be exposed? Are there ways of synthesizing this content or making it more readily available to the people it's designed for and others?

I've been drafting contracts with a heavy focus on cryptocurrency since 2014. This blog post gives a few tips I've picked up over the years.

Types of Contracts

Confidentiality is key to the work of lawyers but most Internet-delivered services have no encryption other than transport encryption (HTTPS). This issue affects even the largest companies such as the 2020 Twitter account takeovers of Obama, Biden, Musk, and others, Snapchat employees looking at photos, the Canada Revenue Agency, and just about everyone else. The basic problem is that the data isn't encrypted so anyone with the right permissions at the company, or someone who can change permissions, can access all of the data. These sorts of services are the primary way that people interact with lawyers in 2021.

Government promises safety from the rough and tumble reality of life. This post is about the balance between protection and reward, and what that means in a globalized world in which Canadian services businesses are increasingly meeting with the opportunities & competition that manufacturers faced decades ago. Specifically, this post is in the context of moves to increase regulatory requirements for Canadian businesses in the cryptocurrency industry, but the issues aren't specific to cryptocurrency or blockchain technology.

Centuries ago, the government promise of safety meant protection from invasion by neighbouring warlords. Today, it means protection from all manner of harms. In Canada, the public demands safety at every turn and the government obliges. It does so by creating new rules and writing them down in uncountable laws, proclamations, guidance, and instructions. The Canadian public is always hopeful that if only one more rule could be created, they will be protected. And yes despite creating millions of rules, our government and its legal system have not eliminated frauds, scams, and cheating. Virtually everyone in Canada has been defrauded by someone. Sometimes the losses are life changing, and the stories are often heart breaking. I hear them from the people who regularly call me to see if a lawyer has the answer to what the government and basic decency failed to prevent. The answer is usually no.

The blockchain space in Canada is booming and dynamic, being composed of many small to mid-sized players. This is great for competition but can make it difficult to find a position. Below are a few companies that are hiring right now (mostly remote positions).

Shakepay

Jack Dorsey, the co-founder of Twitter, is selling his first tweet and the current highest bid is $2.5 million USD. Is the start of a new art of capitalism?

MCMA holds the promise of a world in which wealth management is diversified, cheap, and algorithmically driven. Imagine an app that allows you to allocate your money the way billionaires do, in a variety of different assets, and according to a professional, free strategy by a famous advisor.

Bitcoin and Ether are notoriously difficult to store securely and approaching the value of the global gold market. This is a $500 million a year business waiting to happen for one of Canada's big banks. Banks have the reputation, technical staff, security, and insurability, to become major players in the future market of storing cryptocurrency.

Cryptocurrencies liberate people from the need to use the financial system. There is no dependency on banks, except for exchanging to money, which largely relies on banks. But there's an opportunity for banks to go back to their roots as trusted places to store wealth. A Canadian bank could likely attract 5% of the world's cryptocurrency for storage if they could offer a secure, fast, insured service. It would immediately be used by institutional investors, high net worth individuals, and a significant portion of the individuals who hold smaller amounts of cryptocurrency.

Here are seven trends happening in the world of blockchain that may affect Canadian and American regulation in the coming years: on-chain insurance, prediction markets, decentralized exchanges, collectibles, digital dollars, securitization and leverage.

Small businesses employ 70% of private sector employees in Canada. They're the lifeblood of employment, but also the key to a dynamic economy. That's fairly accepted in Canada politically and in the media. But what's not accepted is the role that investment laws play in restricting access to capital.

I'm hosting a free weekly session for the next 30 days to answer and discuss legal questions. It'll be on Wednesdays from 10-12 EST on Google Meet (link below). Quite informal. The first one will be next Wednesday, November 18th.

The NBA has licensed their brand and content to Dapper Labs for a new type of collectible pack marketed as "Top Shot". Top Shot is like baseball cards, coming in digital foil packs, but with videos and a marketplace for trading. This is the evolution of a breakout hit CryptoKitties a couple years ago by the same developer. Now they've launched a produced in partnership with one of the biggest sports franchises.

Blockchain-based systems with public open data records are one of the best ways to create a permanent, publicly-verifiable record of data. I've previously written about learning from supply chain/luxury brand work in blockchains, and how that could be applied in the context of tree planting and carbon trading. But these systems could also be used to better track pollution. Specifically, this approach could be used to upgrade the Canadian NPRI system.

Luxury brands like Breitling and Louis Vuitton have embraced the use of blockchain technology for anti-counterfeiting purposes. These approaches are now mature enough that, in conjunction with IoT and stablecoins, they could provide significant benefits for environmental initiatives. This article explains how these disparate technologies could be turned into real action that can increase public faith in environment-driven projects like carbon trading.

Why Make A Search Engine?

There are many reasons to make a search engine but I have a specific need in mind: knowing about government changes. My law practice requires me to know about regulatory changes or legal developments in the area of virtual currency to within a day or two. Shouldn't every lawyer know about relevant changes as soon as they happen? The rest of this blog post explains my attempt to do this over the last year in my spare time on weekends, why this is an incredibly hard problem, and finally: some pointers for anyone who wants to try to do this. Below is a screenshot of the search engine I made.