Blockchain, cryptocurrencies and initial coin offerings
Distributed ledgers are technologies that facilitate efficient sharing of data. Some distributed ledger technologies are built as blockchains, the best known of which is the Bitcoin blockchain.
Common characteristics of these systems are that they:
- use public and private key cryptography
- are peer to peer (distributed); and
- have some sort of consensus mechanism.
Depending on the specific implementation, blockchain technologies offer a number of benefits to users including transparency, immutability, process simplification, the lowering of transaction costs and even elimination of counterparty risk.
While there remain a significant number of technical and legal challenges to be overcome, blockchain technologies have the potential to unlock a huge amount of value for organisations adopting them.
Financial institutions in particular are looking closely at blockchain both independently, and as part of consortia such as R3, CEV, Ripple and Digital Asset Holdings.Use cases for blockchains span areas as diverse as payments, share trading and identity management. Outside financial services, the creative industries are looking to blockchain as a means of facilitating payments to content creators and for the management of intellectual property rights; governments are looking at blockchain to aid voter registration and enable voting; healthcare organisations are exploring blockchain as a means of storing and securely sharing patient records and many other industries may benefit from blockchain applications that establish provenance and enable supply chain transparency.
We are still in the early days of the blockchain revolution the technology needs further development and testing, and market participants need to experiment to find the use cases that are best suited to the benefits blockchains offer and recognise it is not a universal technology panacea. The legal analyses of blockchain solutions are also in their early stages, and regulatory responses are not yet clearly defined. On the following pages we provide our insights on this evolving landscape, track key market developments and introduce our blockchain experts across the firm.
Read our insights on the key market developments within the evolving Blockchain landscape
Initial coin offerings: Innovating in a changing market
Banking on the blockchain
Automation and blockchain in securities issuances
regulatory sandbox and analyse some of the legal issues presented.