SIPA

Presentation

Cryptocurrency and Blockchain

Gerald Rome

Colorado Securities Commissioner

April 24, 2018

Introduction

• Distributed Ledger Technology (“Blockchain”)

• Cryptocurrencies

• Initial Coin Offerings

Definition

Distributed Ledger Technology (Blockchain”)

An account book that is maintained on an unconnected network of computers around the world, accessible to multiple users at once, that stores unalterable data. It can be programed to accept verified data and take a specified action in response to someone else’s action. Because it is encrypted, it is difficult to attack or corrupt. It keeps track of everything you exchange with someone else.

Centralized Ledger

Distributed Ledger

Blockchain Hash Function

.

Cryptocurrency

• Usually a distributed digital ledger system

which tracks financial balances and

transactions

• Encryption techniques are used to

generate units of digital money and verify

transactions

• Operates independently of a central bank

Where did bitcoin come from?

• 2009

• Remove government/establishment from

involvement and control

• Enable an anonymous banking system

• Reduce or eliminate fees (eliminate the

middle man)

# Name Market Cap Price Volume (24h) Circulating SupplyChange

(24h)Price Graph (7d)

1 Bitcoin $158,883,770,576 $9,347.85 $8,982,780,000 16,996,825 BTC 4.89%

2 Ethereum $69,337,310,906 $700.23 $3,228,060,000 99,020,907 ETH 8.72%

3 Ripple $36,041,831,176$0.92069

8$1,233,940,000 39,146,203,398 XRP * 5.11%

4Bitcoin Cash

$25,356,741,395 $1,483.59 $1,984,270,000 17,091,475 BCH 6.37%

5 EOS $11,093,477,386 $13.62 $1,977,520,000 814,397,424 EOS * 17.68%

6 Litecoin $9,105,332,670 $161.92 $553,609,000 56,232,138 LTC 7.08%

7 Cardano $8,100,498,356$0.31243

4$314,928,000 25,927,070,538 ADA * 8.97%

8 Stellar $7,314,864,399$0.39389

9$98,144,800 18,570,406,118 XLM * 6.15%

9 IOTA $6,036,722,845 $2.17 $91,285,8002,779,530,283 MIOTA

*2.89%

10 NEO $5,402,696,000 $83.12 $183,738,000 65,000,000 NEO * 8.72%

Primary Uses

• Speculation

• Ransomware

• Illegal goods

• Commercial adaptation has largely failed

Initial Coin Offerings

• Organizations have begun to raise funds

by issuing cryptocurrency

• Initial Coin Offering

• Functions like an IPO

Different kinds of cryptocurrency

• Currency

• Platforms

• Utility Tokens

• Tokenized Assets

• Equity tokens

• Hybirds

Regulation

• IRS – Property for tax purposes

• Securities Regulators – ICOs; Exchanges

• Commodity Futures Trading Commission

• Money Transmitters

Questions?