Read time: 4 min.
I looked at 304 Initial Coin Offerings (ICO) to find the ones impacting the legal industry. I was simply fascinated and slightly fearful seeing all the beautiful solutions on the Blockchain. Here are my notes and numbers.
I see Blockchain as a technology that is naturally suited to improve the law. If legal contracts were drafted to create trust, contracts on the Blockchain is a 10x improvement. To clarify, I’m still learning what Blockchain is and I quickly discovered that it isn’t synonymous with an ICO. Not every company raising funds through an ICO necessarily uses Blockchain in their proposition. Some just use the tokens to raise money.
My goal was to find the ICO startups impacting the legal industry. I did not see any that could help legal professionals do their jobs more efficiently, I did find many that make entire legal frameworks obsolete. One framework that is imminently threatened: Intellectual Property (IP) law, also known as the rules that help you monetize your data, knowledge, and anything in between.
Here are samples of how many we found that promise to help you earn money with Intellectual Property rights on the Blockchain:
A former 2014 Miss Iowa started her own coin to protect..cannabis. And it wasn’t her first cannabis tech company either. It’s why I called these the Fields of Dreams.
Out of the 209 I ultimately ended up including in our dataset, about 32 claim to be either unique or first. To be fair, some are clearly category-defying concepts which we can not shoehorn into existing contexts. Doc.ai describes itself as “Blockchain based AI that performs deep learning computations on quantified biology for predictive analytics and personal health”.
Ok, take a deep breath. Whatever it means, they’ll have to develop some HIPAA compliant, privacy technology in order to operate successfully. While I classify it as ‘RiskTech’ and tag it with ‘Privacy’, it actually could be ‘LegalTech’ since they choose to use Blockchain.
In any case, they raised $11 million with their ICO to pursue this dream of a virtual doctor. And while I was flipping through their site, I couldn’t help but replace the words ‘Health’ with ‘Legal’ in front of ‘care’. It shouldn’t be farfetched to use the same principles to alleviate legal risks as it is to avoid health risks. One can always dream.
This brings me to my other point: these 209 offerings collectively represent a value of $4.37 billion.
To get a better perspective, on Legalpioneer Where select Market ‘LegalTech’. On the Stage toggle click on ‘Seed and ‘Known’ and then drag the date slider to January 2017, you’ll see 28 LegalTech companies that collectively raised $110 million in cash.
Now just click on ‘ICO’ in the Stage toggle for the same period, and you’ll see 55 LegalTech startups raising up to $1 billion via coin.
After eyeballing a hundred or so Token sales pages I started noticing a pattern. First, each site was meticulously designed to evoke trust. Every single one we included in our dataset had HTTPS-encryption. Crisp team photo’s, gorgeous roadmaps, cute videos and the omnipresent particles Hero. Social channels like Facebook, Twitter, Slack, and Telegram all had activity. This is a tip for any LegalTech company aspiring to launch a trustworthy product, check out the ICO playbook.
However, most sites were generous in communicating every detail except one: a known location. In some cases, it was extremely difficult to distill where their main operations were based. While I do understand that they’re all “distributed” and “decentralized”, you may still need a physical address to receive that 105″ curved 4K display..for the office. Trust starts with the ability to locate you and it’s one of the reasons we go to great lengths to map it in Legalpioneer Where.
Since I only looked at initiatives were the Initial Coin Offering already ended, I got an eerie empty feeling after visiting each site. It felt like I was part of the cleaning crew coming in after a wild beach party. But while I may have been wandering a wasteland of promises, I did feel a sense of missing out on something special (FOMO).
An EY research reported (PDF) that most white papers were heavy on buzz and light on substance. I only glanced at a couple of white papers to lookup their elusive whereabouts. But the EY report was correct that the ones I saw were written in such a way, I felt stupid and smart at the same time. Using terms like “Turing complete” and “oraclized“. Well, I let you Google them yourself. While you’re at it, below are some links you could use to start exploring these fields of ICO’s. Let’s dream.
In memory of Geert
Originally published at www.legalcomplex.com on February 19, 2018.