Biggest Blockchain Bottleneck
One of the biggest bottlenecks in the entrepreneurial blockchain space today is getting experienced legal advice. Every blockchain entrepreneur I’ve spoken with in NY or SF over the past few weeks is seeking introductions to legal counsel because they are on long waitlist to get time. There is a shortage of blockchain legal experts relative to the demand.
In fact, Just today, Protostarr just announced it’s shutting down and returning it’s ICO proceeds after an SEC Investigation. As Forbes reports, “Protostarr did not consult a lawyer before its ICO, a surprising omission in a space where many teams are aware that the way in which regulations will be applied to tokens is still up in the air.” Like many new ICOs, they probably went without legal counsel because they couldn’t find anyone to do the work with them.
We aren’t going to create more blockchain lawyers overnight — or change law school classes to create experts to meet the demand in time. Instead, one proven way to solve a talent bottleneck is by better distribution of information. Take mobile app development for example, in the early days, early practioners in the space were blogging, speaking, and sharing about what they had learned while building for the first time. That information was in high demand but quickly became highly distributed.
In blockchain innovation, especially around regulation, legal frameworks, and tax laws, there is a lot of new information being created but very little of it is being distributed. There is a small group of insiders, either discussing in small meetings or through Telegram or Signal chat rooms, that are comparing notes on these topics. It works well for insiders, but does little to move the industry’s knowledge forward, especially young companies.
But company size doesn’t matter, even big corporations aren’t immune. I had a conversation with a Fortune 100 Crypto expert this week about how the technology was adopted within a big bank. At the time, their Head of Regulatory was consulted on how to handle blockchain projects within the organization, however, they didn’t have the expertise. They tapped a more junior person who had direct experience in the space to help advise up the chain on how the regulation should be handled going forward. Their internal network provided expertise they used to educate others in the company.
Practitioners are the best way to create best practices, and peer networks are the best way to distribute that information publicly. We’ve seen bottom-up information work for every type of web innovation and this is no different.
The ecosystem is currently missing this type of coin-agnostic education center. Whether it will happen with an accredited institution or more as an accelerator like YC is unknown. My hope is there is more of an 0pen-source approach, that relies less on how to monetize, and more on how to democratize access.
Once we create a more distributed informal education system of best practices, we can create more room for innovation and better standards so we don’t see more companies jumping in with limited understanding of what legal frameworks are required as a baseline to make a project viable.
At Lattice Ventures, we’ve had closed door conversations about these different topics and are excited to create more ways to have them in public, to break out blockchain learning from it’s current silos. When we find ways to give a better legal baseline to any company, we create more room for meaningful projects to move forward.
If you are interested in discussing the regulatory, financial, legal, and technology fundamentals around blockchain — please sign up here to join us for our upcoming Blockchain conversations.
Image source: Source: http://bitcoinrewind.com/will-blockchain-technology-transform-practice-law/