Blockchain Testimony on LB695 at the Nebraska Legislature
Recently, Kyle Tut testified at the Nebraska Legislature in front of the Judiciary Committee on LB695. That testimony is provided below.
Chairwoman Ebke, members of the Judiciary Committee, for the record my name is Kyle Tautenhan (K-Y-L-E T-A-U-T-E-N-H-A-N). I am the founder of BlockEra, a company that provides blockchain consultation in the financial and agricultural sectors. I am here today in opposition to LB 695.
I oppose this bill speaking from a technical perspective because we are too early in blockchain technology’s lifecycle to be creating laws and defining technical terms which have been proposed in this bill.
To start, the idea of legally enforceable smart contracts is a positive and noble goal.
This bill, like 691, dangerously attempts to define distributed ledger technology and smart contracts without consideration to where the technology might go in the future.
For example, LB 695 isn’t able to clearly define what distributed ledger technology is without contradictions.
Section 2 declares: For purposes of this section, smart contract means an event-driven program or computerized transaction protocol that runs on a distributed, decentralized, shared, and replicated ledger that executes the provisions of a contract by taking custody over and instructing transfer of assets on the ledger.
With the introduction of the term decentralized and shared, we’ve created different definitions of distributed ledger technology in the same bill, nevermind across bills.
This bill doesn’t know the difference between public and private blockchains or why such definitions should even matter.
Additionally, the section goes on to declare that smart contracts can have custody of and be the assets themselves. As heard in my testimony against LB 691, tokens can be anything. At an even deeper level, smart contracts are tokens and tokens are virtual currencies.
Which brings up the question of when is a smart contract a token and when is a smart contract a virtual currency? Or, put another way, when is a token a smart contract and when is a virtual currency a smart contract?
I’ll leave you with my final thought. If a misplaced comma can alter the meaning of a bill, how can we expect this bill to properly legislate a technology that hasn’t even developed proper definitions yet?
Thank you for allowing me to testify today. I would be happy to answer any questions you might have.