The day is coming where most people should have at least a basic understanding of blockchain technology. In the meantime, there are five professionals that need to know and understand blockchain technology now.
Contrary to public belief, cryptocurrencies are being regulated in the U.S.A. The Securities and Exchange Commission, Commodities Futures Trading Commission, Federal Trade Commission and Internal Revenue Service are all government agencies that have placed some type of regulation on activities involving cryptocurrencies. The increase in the amount of entrants into the blockchain space, will undoubtedly lead to an increase in the level of urgency that the government has in getting regulatory control of this space. A foreshadowing of this was seen by the government’s reaction to the announcement of Libra.
So far the government has fallen short in providing a solid regulatory framework on blockchain and cryptocurrency for industry participants to follow. Until they do, the industry will need to rely heavily on the effective and prudent guidance of attorneys to help them navigate these choppy regulatory waters. This is not limited to the attorneys who may be interested in acting as “specialists” within this space. This technology is already affecting many traditional industries and legal practice areas. This includes attorneys practicing in tax, securities and commodities, estate planning, matrimonial, criminal, privacy and cybersecurity law.
They say the only two guarantees in life are death and taxes. True to form, the IRS was one of the first if not the first regulatory body in the US to take a formal position on cryptocurrencies. The IRS first imposed regulations on cryptocurrencies back in 2014 and has been refining their approach to enforcing them ever since. Any individual or organization buying and selling cryptocurrencies, accepting cryptocurrencies for payments, or touching cryptocurrencies in any other ways may be triggering taxable events. Accountants need to understand how cryptocurrencies work, how they are being regulated from a tax perspective and how their clients can be affected by their activities. Specifically, the forensic accountants and auditors who are called on to “find the money”, need to understand how crypto is held, transferred, purchased and sold so they can effectively apply their auditing strategies to cryptocurrencies.
If only I had a Bitcoin for every story I have heard about a financial advisor telling a client to stay away from Bitcoin and other cryptocurrencies because it was a “scam” or a “bubble”. If only those clients had a Bitcoin for every time they were told to stay away because it was a “scam” or “bubble”. This is not to be construed as suggesting that every financial advisor should advise their clients to buy up Bitcoin; although they would have some very happy clients had they done so a few years ago. The reality is the people who use the words “scam” and “bubble” to make a blanket statement about all cryptocurrencies is just speaking from a lack of real understanding. Many investment advisors acknowledge not having a true understanding of how cryptocurrencies work. Financial and investment advising is largely about education. Advisors are doing a disservice to their clients if they do not understand the subject matter being discussed or at least failing to provide a practical basis behind their statements.
Financial and investment advisors need to learn what cryptocurrencies are, how they are created, what asset classes they would properly fit into so they can speak intelligently with their clients on the subject. The increasing use of cryptocurrencies is going to lead to more financial advisors being asked for subject guidance. These professionals should take the time to properly educate their clients on what they are, how they work and what the investment risks are. And if the client still wants to proceed, it may be worth the advisor’s time to be able to explain to those clients safe and secure ways to buy and custody different cryptocurrencies. It is a grey area in which some larger investment advisor firms may prohibit their advisors to advise on specific cryptocurrencies or broker the trades. This may be a reason why many advisors stay away from them to begin with. However, advising is about bringing value to clients. Imagine the additional value advisors whom aren’t prohibited, can provide their clients when being able to speak intelligently on the topic.
Software Developers and Programmers:
Software developers, programmers and coders are in high demand. As the blockchain industry continues to grow we will see an increase in the development of blockchain-based applications. This will inevitably lead to an increase in demand for full stack blockchain application developers and there is a serious dearth of talent in this area. Despite the growing amount of software programmers and developers out there, for the many that promote themselves as full stack blockchain developers, there are very few who actually can create a full stack blockchain built application. Since there is a lack of talent in this growing field, the ability to build blockchain-based applications can be quite a lucrative skill set for any programmer to possess. Programmers should learn about blockchain technology, how it works, its primary characteristics and programming languages used in developing its applications to increase their value in this field.
Information Technology Professionals:
One of the best solutions that blockchain technology provides is with data privacy and cybersecurity. Data privacy and cybersecurity issues are becoming more prevalent in the corporate world and one of the best solutions to this problem is blockchain technology. As more companies decide to integrate blockchain technology as an enterprise solution for their company, they will need to turn to knowledgeable information technology specialists to aid in this implementation. They may hire the software developer described above to build out the application but its going to be the Information Technology specialists who they will rely on to oversee the long term integration and system maintenance.