Brussels Legal Hackers joined the second annual Computational Law & Blockchain Festival, the decentralized festival of events in March 2019 throughout the world on the mechanization of legal reasoning and on blockchain.
On Saturday 16 March 2109 in the venue of StartIt some 30 legal hackers focussed on blockchain technology, its use cases, its relation to the (European) legislation on data protection, investment protection, payer and payee protection and taxation.
A short report per keynote:
Blockchain, the technology
Gerrie Smits kicked off the event explaining
(a) the basics of blockchain (a.o. immutability, “if… then…”, value transfer, tokenisation and token transfer, decentralisation, game theory and aligned incentives) and
(b) looking at it from a business perspective (“Is This Something For Us?“)
with practical examples of (actual) use cases like a local blockchain to follow the support money granted to refugees, fractional ownership of real estate, incentives to cycle to school, “selling your eyeballs” (advertising),…
through the value mapping framework, which brings innovation (value) theory and design thinking in the picture
To conclude he launched a specific point of interest, namely organisational design. Starting from the question whether the “tragedy of the commons” can be overcome (looking at theories of a.o. Elinor Ostrom) , he looks at initiatives that may address this by using blockchain technology: Colony, Aragon, OrgTech,…
This is material for a (future) hack(athon).
The title of his keynote “Blockchain is WTF” refers to the title of the book he wrote (in Dutch) which is packed with use cases.
Koen Vingerhoets explained
(a) the basics of blockchain in its 6 key elements (transparency, ownership, traceability, distributed, trust, smart contracts), which has proven to work with boards of directors, corporate management, etc., and
(b) a few technical aspects on blockchain, like hashing, smart and ricardian contracts, bugs in the code, private ledgers, aspects to take into account to govern a (private) blockchain, and the impact of (EU) regulation.
One of his conclusion is that he sees a move in the (corporate) blockchain community
- from permissionless to permissioned blockchains
- from “unbound decentralisation” to governance
- from cryptocurrencies to smart contracts (even ricardian contracts)
Blockchain and privacy / data protection
Axel Beelen takes a look at how blockchain and the (European) data protection regulation can be reconciled.
Questions he addressed were:
- What is GDPR?
- What are the basic principles of GDPR?
- Can personal data on the blockchain (and thus application of GDPR) be avoided?
- How does data minimisation pitch in?
- How does pseudonymisation pitch in?
- Who has what role in a blockchain setup? controller, joint controller,…
- How would rights of data subjects work?
Alex found sources like
- Michèle Finck’s papers
- the French Data Protection Authority CNIL (with a 2018 paper on blockchain)
- the EU Blockchain Observatory & Forum (with a dedicated report on blockchain and GDPR)
Axel is the author of a practical GDPR guide (in French).
Regulation of crypto-assets
Willem Van de Wiele took it upon him to update us on the legal aspects of blockchain and crypto-assets:
(1) at the EU level
(2) at the national level
Taxation of crypto-assets
Hendrik Putman, partner at the law firm Mythra, explained how cryptocurrencies in Belgian are (likely to be) taxed.
- what are the potential bases for taxation?
- what are indicators of “professional income”?
- what are indicators of “miscellaneous income”?
- is allocating the assets to (not ) for-profit corporations a good idea?
- how does the bitcoin (taxation) tool work ?
- when is it reasonable to go for a tax ruling?
- when is it reasonable to go for a tax documentation preparation?
The conclusion is that rather than going for a formal ruling by the tax authority, the most commonly advised practice is to draft a “defence memorandum” with all evidence of the origin and transactions in crypto-assets.
Blockchain as payment instrument
Niels Vandezande, from the niche law firm Time.lex discussed virtual currencies
- What was the payment landscape when bitcoin started out (2008/2009) v what is it now?
- What is bitcoin’s place in the payment landscape?
- What are alternatives (for the underbanked)?
- What is money?
- Does the e-money directive apply to virtual currencies? in principle, no
- Does the payment services directive apply to virtual currencies (services)? in principle, no
Niels is the author of a PhD, which is published as a book, on “Virtual Currencies: a legal framework” (in English).