The Path to Cryptomania - Bitcoin and Beyond

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@ computational professor daniel martin katz danielmartinkatz.com BLOCKCHAIN, CRYPTOCURRENCY AND LAW professor nelson rosario THE PATH TO CRYPTOMANIA - BITCOIN AND BEYOND nelsonmrosario.com @ nelsonmrosario BLOCKCHAINLAWCLASS.COM

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DANIEL MARTIN KATZ E D U | I L L I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW

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BLOCKCHAINLAWCLASS.COM CRYPTOMANIA

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https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html

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EVERYONE WANTS TO TALK ABOUT THE PRICE ACTION IN CRYPTOCURRENCY BLOCKCHAINLAWCLASS.COM

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BLOCKCHAINLAWCLASS.COM BITCOIN BUBBLE

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BLOCKCHAINLAWCLASS.COM BITCOIN BUBBLE (2013)

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BLOCKCHAINLAWCLASS.COM BITCOIN BUBBLE (2013) BITCOIN BUBBLE (2017- 2019)

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BLOCKCHAINLAWCLASS.COM AND FROM THERE …

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THE PRICE IS (ARGUABLY) THE LEAST INTERESTING THING ABOUT CRYPTOCURRENCY OKAY PERHAPS THE PRICE $$ IS A LITTLE BIT INTERESTING :) BLOCKCHAINLAWCLASS.COM

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SO - WHAT IS INTERESTING ABOUT CRYPTOCURRENCY? BLOCKCHAINLAWCLASS.COM

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TIME FOR A LITTLE HISTORY... BLOCKCHAINLAWCLASS.COM

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THE 2008 BITCOIN WHITE PAPER https://bitcoin.org/bitcoin.pdf BLOCKCHAINLAWCLASS.COM

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WHO IS SATOSHI NAKAMOTO ? BLOCKCHAINLAWCLASS.COM

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WHO IS SATOSHI NAKAMOTO ? NOT ACTUALLY THE REAL SATOSHI NAKAMOTO HE JUST WANTED A ‘FREE LUNCH’ FROM A REPORTER BLOCKCHAINLAWCLASS.COM

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ON OCTOBER 31 2008 AN ANONYMOUS INDIVIDUAL GOING BY THE NAME SATOSHI NAKAMOTO PUBLISHES A PAPER TO A CRYPTOGRAPHY MAILING LIST …. BLOCKCHAINLAWCLASS.COM

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“I'VE BEEN WORKING ON A NEW ELECTRONIC CASH SYSTEM THAT'S FULLY PEER-TO-PEER, WITH NO TRUSTED THIRD PARTY.” THE PAPER CLAIMED BLOCKCHAINLAWCLASS.COM

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TIME FOR A LITTLE MORE HISTORY ... BLOCKCHAINLAWCLASS.COM

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2008 - FINANCIAL CRISIS LIVE SHOT OF BEN BERNANKE’S DESK 9/15/08 BLOCKCHAINLAWCLASS.COM

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2008 - FINANCIAL CRISIS 9/15/2008 - LEHMAN BROTHERS FILES FOR BANKRUPTCY 5/29/2008 - BEAR STEARNS IS SOLD AT MASSIVE DISCOUNT 9/14/2008 - MERRILL LYNCH IS SOLD AT MASSIVE DISCOUNT BLOCKCHAINLAWCLASS.COM

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THE RESPONSE = BAILOUTS + QUANTITATIVE EASING BLOCKCHAINLAWCLASS.COM

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BAILOUTS + QUANTITATIVE EASING BLOCKCHAINLAWCLASS.COM

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TREMENDOUS AMOUNT OF MONEY FROM CENTRAL BANKS PROPPED UP THE FINANCIAL WORLD BLOCKCHAINLAWCLASS.COM

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THE CREATOR OF BITCOIN WAS HOSTILE TO THIS TYPE OF MONETARY POLICY BLOCKCHAINLAWCLASS.COM

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HOSTILITY TO CENTRAL BANKERS IS ONE OF THE REASONS BITCOIN HAS A HARD CAP OF 21 MILLION BITCOIN TOTAL BLOCKCHAINLAWCLASS.COM

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THIS DOESN’T TELL THE WHOLE STORY BLOCKCHAINLAWCLASS.COM

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GOTTA GO BACK EVEN FURTHER... BLOCKCHAINLAWCLASS.COM

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1996 - 2004 - DOT COM BUBBLE BLOCKCHAINLAWCLASS.COM

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TRUCKLOADS OF MONEY ARE DUMPED INTO ANY COMPANY CLAIMING TO DO ANYTHING RELATED TO THE INTERNET BLOCKCHAINLAWCLASS.COM

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SOUND FAMILIAR? BLOCKCHAINLAWCLASS.COM

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OKAY TIME TO SHIFT GEARS FOR A SECOND … BLOCKCHAINLAWCLASS.COM

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THE INFRASTRUCTURE OF THE INTERNET IS FOCUSED ON HOW DATA IS HANDLED AND HOW IT IS SENT THROUGH THE NETWORK BLOCKCHAINLAWCLASS.COM

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OPEN SYSTEMS INTERCONNECTION (OSI) MODEL BLOCKCHAINLAWCLASS.COM

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INTERNET INFRASTRUCTURE BLOCKCHAINLAWCLASS.COM

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WHAT’S MISSING FROM THE INFRASTRUCTURE? BLOCKCHAINLAWCLASS.COM

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TRUST AND IDENTITY BLOCKCHAINLAWCLASS.COM

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THE PROBLEM OF TRUST AND IDENTITY WHO CAN YOU TRUST? WHAT CAN YOU TRUST? BLOCKCHAINLAWCLASS.COM

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THESE PROBLEMS LIE AT THE CORE OF WHAT BITCOIN PURPORTS TO DO BLOCKCHAINLAWCLASS.COM

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THE ECONOMIST CALLS BLOCKCHAIN ‘THE TRUST MACHINE’ BLOCKCHAINLAWCLASS.COM

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BLOCKCHAINLAWCLASS.COM BUT IT ALL BEGINS WITH BITCOIN...

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SO LETS GO BACK TO THE 2008 BITCOIN WHITE PAPER https://bitcoin.org/bitcoin.pdf BLOCKCHAINLAWCLASS.COM

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THE DOUBLE SPEND PROBLEM “A payee can verify the signatures to verify the chain of ownership. The problem of course is the payee can't verify that one of the owners did not double-spend the coin. A common solution is to introduce a trusted central authority, or mint, that checks every transaction for double spending.” https://bitcoin.org/bitcoin.pdf BLOCKCHAINLAWCLASS.COM Bitcoin White Paper

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THE DOUBLE SPEND PROBLEM HOW CAN YOU BE SURE THAT THE DIGITAL MONEY YOU RECEIVED HAS NOT ALREADY BEEN SPENT? TRADITIONALLY BANKS PROVIDED THE SOLUTION — BITCOIN OFFERS A DECENTRALIZED SOLUTION BLOCKCHAINLAWCLASS.COM

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THE DOUBLE SPEND PROBLEM TRANSACTIONS ON THE BITCOIN NETWORK ARE PUBLIC TO EVERYONE IN THE NETWORK BLOCKCHAINLAWCLASS.COM (BLOCKCHAIN CAN BE PRIVATE IN OTHER INSTANCES)

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THE DOUBLE SPEND PROBLEM THUS, ANYONE CAN VERIFY THAT FUNDS ON THE BITCOIN NETWORK HAVEN’T BEEN SPENT YET BLOCKCHAINLAWCLASS.COM

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DIGITAL ASSETS BITCOIN RESULTS IN THE FIRST UNIQUE VERIFIABLE DIGITAL PROPERTY BLOCKCHAINLAWCLASS.COM

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‘THE TRUST MACHINE’ CRYPTO INFRASTRUCTURE IS A NEW WAY TO HANDLE TRUST ON THE INTERNET BLOCKCHAINLAWCLASS.COM

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2009 - BITCOIN NETWORK GOES LIVE BLOCKCHAINLAWCLASS.COM

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SO THEN WHAT ? BLOCKCHAINLAWCLASS.COM

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SO THEN WHAT ? BUY PIZZA BLOCKCHAINLAWCLASS.COM

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2010 - THE BITCOIN PIZZAS ON MAY 22, 2010 A PROGRAMMER BOUGHT TWO PAPA JOHN’S PIZZAS FOR 10,000 BITCOIN BLOCKCHAINLAWCLASS.COM

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2010 - THE BITCOIN PIZZAS 10,000 BITCOIN CURRENT VALUE $35 MILLION+ IN 2019 BLOCKCHAINLAWCLASS.COM

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OKAY, MAYBE TRADE SOME BITCOIN BACK AND FORTH IN CASE IT’S WORTH SOMETHING LATER BLOCKCHAINLAWCLASS.COM TRADE AND MINE

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2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM

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2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM EARLY ON MT. GOX WAS THE LARGEST BITCOIN EXCHANGE

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2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM AT ITS HEIGHT MT. GOX HANDLED 70% OF ALL BITCOIN TRANSACTIONS

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2010-2014 - MT. GOX BLOCKCHAINLAWCLASS.COM IN 2013, MT. GOX ‘LOST’ 850,000 BITCOINS VALUED AT $450 MILLION (NOW WORTH MORE THAN 7 BILLION)

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HOW TO BURST A BUBBLE BLOCKCHAINLAWCLASS.COM

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OTHER UNSAVORY THINGS BLOCKCHAINLAWCLASS.COM 2011 - 2013 SILK ROAD

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SILK ROAD WAS EBAY FOR ILLEGAL STUFF BLOCKCHAINLAWCLASS.COM 2011 - 2013 SILK ROAD

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THE END OF THE ROAD 2015 RECEIVES LIFE SENTENCE FOR MONEY LAUNDERING, COMPUTER HACKING, CONSPIRACY TO TRAFFIC NARCOTICS ROSS ULBRICHT AKA THE DREAD PIRATE ROBERTS

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PARODY COINS? BLOCKCHAINLAWCLASS.COM 2014 - 2014 COINYE

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PARODY COINS? BLOCKCHAINLAWCLASS.COM KANYE WEST SUED CONYE AND THUS THE COIN NEVER WENT LIVE

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PARODY COINS? BLOCKCHAINLAWCLASS.COM DOGECOIN STILL HAS MARKET CAP OF 225M IN 2019

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BLOCKCHAINLAWCLASS.COM WHILE THESE CRAZY PROJECTS WERE GOING ON … SOMETHING WAS HAPPENING

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INNOVATORS AND EARLY ADOPTERS BLOCKCHAINLAWCLASS.COM

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ORGANIZATIONS START TO GET EXCITED ABOUT THE TECHNOLOGY THAT UNDERLIES BITCOIN THE BLOCKCHAIN BLOCKCHAINLAWCLASS.COM

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BLOCKCHAIN PATENTS FILINGS START MOVING 2011 - 2016 BLOCKCHAINLAWCLASS.COM

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BLOCKCHAIN PATENTS FILINGS START MOVING http://patentvue.com/2018/01/12/blockchain-patent- ﬁlings-dominated-by-ﬁnancial-services-industry/ BLOCKCHAINLAWCLASS.COM

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BLOCKCHAIN PATENTS FILINGS START MOVING BLOCKCHAINLAWCLASS.COM http://patentvue.com/2018/01/12/blockchain-patent- ﬁlings-dominated-by-ﬁnancial-services-industry/

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LARGE ORGANIZATIONS START TO KICK THE TIRES ON CRYPTOCURRENCY AND BLOCKCHAIN TECHNOLOGY BLOCKCHAINLAWCLASS.COM

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BIG PLAYERS SHOWING UP

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ENTERPRISE CONSORTIUMS 25 GLOBAL CONSORTIUMS 13 IN FINANCIAL SERVICES 2 IN HEALTHCARE 10 IN THE USA, THREE IN THE UK 22 STARTED IN 2016 BLOCKCHAINLAWCLASS.COM SOURCE: DATA FROM 2016, WILLIAM MOUGAYA

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FOUR WORKING ON ASPECTS OF STANDARDS AVERAGE NUMBER OF MEMBERS IN EACH: 25 LARGEST MEMBERSHIPS: 100 (HYPERLEDGER AND ISITC) TOTAL NUMBER OF PARTICIPANTS: 550 ENTERPRISE CONSORTIUMS SOURCE: DATA FROM 2016, WILLIAM MOUGAYA BLOCKCHAINLAWCLASS.COM

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BLOCKCHAIN + ROBOTICS BLOCKCHAIN + AUTOMATION BLOCKCHAIN + INTERNET OF THINGS BLOCKCHAIN + ARTIFICIAL INTELLIGENCE BLOCKCHAIN + OTHER EMERGING TECH BLOCKCHAINLAWCLASS.COM

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LAW FIRMS WADE INTO THE WATERS BLOCKCHAINLAWCLASS.COM

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ADDITIONAL EARLY EXAMPLES IN LAW-LAW LAND

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legalconsortium.org

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AS A MATTER OF FULL DISCLOSURE LEXPREDICT IS A COMPANY CO- FOUNDED BY DAN KATZ https://agreements.network/ (ONE OF THE INSTRUCTORS OF THIS COURSE) (ONE OF THE INSTRUCTORS OF THIS COURSE)

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THE NUMBER OF COINS BLOCKCHAINLAWCLASS.COM GROWS SUBSTANTIALLY

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“EVERY TIME THERE IS A NEW ICO A SECURITIES LAWYER GETS THEIR WINGS …” ICO’S TAKE OFF BLOCKCHAINLAWCLASS.COM

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https://www.cnbc.com/2017/11/27/bitcoin-exchange-coinbase- has-more-users-than-stock-brokerage-schwab.html https://www.cnbc.com/2017/11/27/bitcoin-exchange-coinbase-has- more-users-than-stock-brokerage-schwab.html COINBASE VS. CHARLES SCHWAB BLOCKCHAINLAWCLASS.COM