Explainers

How do token sales fit with securities regulations?

The case for treating some crypto-tokens as securities—and some not.

What is “open source” and why is it important for cryptocurrency and open blockchain projects?

Open source software development is essential to building trust and safety into blockchain networks. Here's why it matters from a policy perspective.

Do you really need a blockchain for that?

Blockchains are essential for some projects and poorly suited for others. Using them where it is not needed could be a costly mistake.

Are there industry standards for securing cryptocurrencies?

How an industry group created a guide for professionally securing open blockchain network tokens.

Why is decentralized and distributed file storage critical for a better web?

The team behind IPFS and Filecoin explain how advances in distributed data storage and strong alignment of market incentives are combining to create a much more secure and efficient web.

What does it mean to issue a token “on top of” Ethereum?

Understanding how Ethereum-based tokens work and their relationship to Ether.

What is “Blockchain” anyway?

Everyone loves tech's hottest buzzword but no one seems to know what it means.

How can blockchains improve the internet’s infrastructure?

Changing the way trust works online could be the biggest upgrade the internet has ever had. And recent events show that it is badly needed.

What does “permissionless” mean?

Much like the internet, open blockchain networks offer a fertile space for innovation where anyone in the world can participate.

Does it matter that different government agencies define Bitcoin differently?

Seemingly contradictory definitions don’t affect the continuing development of cryptocurrencies but can be a little confusing to navigate.

What is Zcash?

This recently launched cryptocurrency has received attention for its enhanced privacy features. Zooko Wilcox, the project's lead developer, explains how these features work and what they mean for policymakers.

What are Appcoins?

We explain Appcoins, what they are and how they can help crowdfund public goods like the development of open protocols.

How can blockchains improve the Internet of Things?

Peter Saint-Andre of Filament explains how blockchains can bolster the security and reliability of the Internet of Things by providing decentralized identity, payments, and ledgers for connected devices.

What is the Lightning Network and how can it help Bitcoin scale?

A plain-language explanation of the Lightning Network, a protocol for scaling and speeding up blockchains. While it was designed to solve some of the technical limitations of the Bitcoin blockchain, it can be implemented on top of any blockchain.

How can Blockchains Improve Access to Health Data?

There's a lot of buzz about blockchains being used to improve health data systems. Emily Vaughn of Gem demystifies these potential applications and explains how these technologies may make our health information more portable and secure.

When does a company actually control customer bitcoins?

A look at how cryptocurrency transactions work, what types of wallets are available, and when wallet providers actually have control of a user’s coins.

What is Ethereum?

Vitalik Buterin, creator of Ethereum, explains what this new technology is and what the vision of a shared world computing platform could one day make possible.

Is Blockchain Different than Bitcoin?

Richard Gendal Brown, Chief Technology Officer at R3 CEV, discusses different types of blockchain innovation.

What are Forks, Alt-coins, Meta-coins, and Sidechains?

Peter Van Valkenburgh, Coin Center’s Director of Research, clarifies some terminology and explains some technical concepts from the ever-changing universe of Bitcoin-derived innovations.

What are Decentralized Markets?

Sam Patterson of OB1 explains how Bitcoin and multisig transactions enable open and decentralized online e-commerce.

How long does it take for a Bitcoin transaction to be confirmed?

Stanford researcher Dr. Joseph Bonneau explains the distinction between “confirmed” and “unconfirmed” Bitcoin transactions.

Why Are Startup Investors Interested in Bitcoin?

Venture capitalist David Lee explains why he and others see promise in Bitcoin and blockchain technology.

Does 18 U.S.C. § 1960 create felony liability for bitcoin businesses?

Attorney Brian Klein explains how relatively recent changes to a federal law make it a felony to run an unlicensed bitcoin business whether you knew you needed a license or not.

Why are there so many Bitcoin scams?

Ben Doernberg looks at Bitcoin scams. There’s nothing new under the sun: same old Ponzi schemes but with shiny new cryptocurrency wrappers. It’s a problem, but it’s cultural, not technological.

What are Micropayments and How does Bitcoin Enable Them?

Chris Smith of BitMesh outlines how a cryptocurrency specific technique, micropayment channels, can enable faster and more secure transactions regardless of the amount or frequency.

How can law enforcement leverage the blockchain in investigations?

Former federal prosecutor Jason Weinstein explains how the nature of Bitcoin’s underlying blockchain can be good news for law enforcement, and how law enforcement can ultimately be good news for Bitcoin.

What is OFAC and how does it apply to Bitcoin?

Attorney Joshua Garcia explains what OFAC is, how it can interact with cryptocurrency businesses, and why it “always applies.”

How is Bitcoin Taxed?

Attorney Bob Derber explains the bitcoin tax classification options that the IRS has considered, what it chose to do in its notice of March 2014, and why.

What is Money Transmission and Why Does it Matter?

Attorney Marco Santori explains how the current state of money transmission laws in the U.S. can affect digital currency startups.

Will Bitcoin Change How We Think about Regulation?

Juan Llanos of Bitreserve shows how cryptocurrencies and the real-time financial auditing they enable could soon lighten the load for financial regulators and regulated companies, all while providing superior consumer protection.

How are Cryptocurrency Investments Different than Securities Investments?

Attorney Jason Somensatto explains why investments in cryptocurrencies pose different risks and rewards and raise different policy concerns than investments in traditional securities.

How Anonymous is Bitcoin?

Adam Ludwin, Co-Founder of Chain.com, differentiates between anonymity and privacy in financial tools.

Is Bitcoin Regulated?

Yes, it is.

What is Multi-Sig, and What Can It Do?

Multi-sig holds enormous potential: trustless escrow, trustless margin, and robust security for consumers, businesses, and anyone who holds or wants to hold bitcoins.

How Are Payments with Bitcoin Different than Credit Cards?

Richard Gendal Brown compares paying with Bitcoin and paying with a credit card. It all comes down to a push vs. a pull, and the consumer’s personal identity can hang in the balance.

What are Smart Contracts, and What Can We do with Them?

This ancient area of law is ripe for automation by cryptocurrency. Read what lawyers should learn about the technology and what the technology will need to learn about lawyering.

What is Bitcoin Mining, and Why is it Necessary?

A plain English explanation of Bitcoin mining. From “hash” to “chain” to “nonce,” learn the terms and become comfortable with the fundamental process that undergirds a cryptocurrency.

Is Bitcoin’s Price Volatility a Problem for the Technology?

Wedbush’s Gil Luria shows why Bitcoin’s notorious price volatility is not a surprise, nor a dilemma.

How can Bitcoin be Used for Remittances?

Attorney Brock Cusick describes the promise Bitcoin holds for hardworking, driven individuals who work overseas from their families: reduced fees for sending money home, security, simplicity and speed.

Are Consumer Bitcoin Balances Especially Vulnerable to Hacking?

Mike Belshe, co-founder at BitGo, explains the risks facing consumers who hold Bitcoin. He discusses storage, theft, payments and privacy, as well as the tools and techniques necessary to use Bitcoin safely.

What are Colored Coins?

Attorney Brock Cusick explains why a Bitcoin could be “colored.” The colored coins concept remains nascent but benefits, risks, and regulatory implications are already coming into view.

Based in Washington, D.C., Coin Center is the leading non-profit research and advocacy center focused on the public policy issues facing cryptocurrency and decentralized computing technologies like Bitcoin and Ethereum. Our mission is to build a better understanding of these technologies and to promote a regulatory climate that preserves the freedom to innovate using permissionless blockchain technologies.