Slide 1

Slide 1 text

@ computational professor daniel martin katz danielmartinkatz.com BLOCKCHAIN, CRYPTOCURRENCY AND LAW professor nelson rosario FROM ANALOG TO DIGITAL TO COMPUTATIONALLY INFUSED INSTITUTIONS nelsonmrosario.com @ nelsonmrosario BLOCKCHAINLAWCLASS.COM

Slide 2

Slide 2 text

DANIEL MARTIN KATZ E D U | I L L I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW

Slide 3

Slide 3 text

CRYPTO TECH (BLOCKCHAIN) SOLVES FOR A SET OF LATENT TRUST PROBLEMS WHICH ARE STILL PRESENT IN A VARIETY OF CONTEXTS … BLOCKCHAINLAWCLASS.COM

Slide 4

Slide 4 text

AS HIGHLIGHTED IN EARLIER SESSIONS, CRYPTO TECH (BLOCKCHAIN) IS REALLY THE NOVEL COMBINATION OF SEVERAL EXISTING IDEAS AND TECHNOLOGIES … BLOCKCHAINLAWCLASS.COM

Slide 5

Slide 5 text

WE HAVE PREVIOUSLY HIGHLIGHTED SOME IMPORTANT HISTORICAL EXAMPLES FROM THE PRE-ANALOG ERA … BLOCKCHAINLAWCLASS.COM

Slide 6

Slide 6 text

IN EACH OF THESE EXAMPLES WE HAVE BEEN ABLE TO LOWER TRANSACTION COSTS AND THEREBY EXTEND THE AMOUNT OF TRANSACTING … BLOCKCHAINLAWCLASS.COM

Slide 7

Slide 7 text

MESOPOTAMIA GREECE ROME MEDIEVAL ERA MERCHANT LAW RENAISSANCE PRE ANALOG ERA THE CORPORATION MARITIME LAW + INSURANCE HUNTER GATHERERS CODE OF HAMMURABI SOME EARLY TRANSACTION ENHANCING INNOVATIONS AND SOCIETIES BLOCKCHAINLAWCLASS.COM

Slide 8

Slide 8 text

THREE RECENT ERAS

Slide 9

Slide 9 text

WE COULD DIVIDE UP THE PAST ~150 YEARS INTO THREE SEPARATE ERAS ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA BLOCKCHAINLAWCLASS.COM

Slide 10

Slide 10 text

IN THE THREE MOST RECENT ERAS THERE ARE A VARIETY OF TRENDS WHICH ULTIMATELY LEAD US TO THE PRESENT … BLOCKCHAINLAWCLASS.COM

Slide 11

Slide 11 text

EACH ERA LAYERS UPON THE PRIOR PERIODS … ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA BLOCKCHAINLAWCLASS.COM

Slide 12

Slide 12 text

OR ALTERNATIVELY CAN BE THOUGHT OF AS A COMBINATORIC IDEA REMIX ELEMENTS OF THESE TRENDS ARE COMBINATORIALLY REMIXED IN VARIOUS NOVEL WAYS BLOCKCHAINLAWCLASS.COM

Slide 13

Slide 13 text

BLOCKCHAINLAWCLASS.COM https://www.ted.com/talks/matt_ridley_when_ideas_have_sex MATT RIDLEY - WHEN IDEAS HAVE SEX

Slide 14

Slide 14 text

TELEGRAPH TELEPHONES INTERNET LONG TAIL COMMERCE (MERCHANT LAW TAKE 2) CRYPTO INFRASTRUCTURE ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA INTERNET OF THINGS FIAT CURRENCY EARLY COMPUTERS GLOBALIZATION PERSONAL COMPUTERS ARTIFICIAL INTELLIGENCE AUTOMOBILE CREDIT CARDS CHARGE CARDS BLOCKCHAINLAWCLASS.COM

Slide 15

Slide 15 text

No content

Slide 16

Slide 16 text

ANALOG ERA

Slide 17

Slide 17 text

TELEGRAPH TELEPHONES ANALOG ERA EARLY COMPUTERS AUTOMOBILE CHARGE CARDS

Slide 18

Slide 18 text

AT&T WAS ACTUALLY - AMERICAN TELEPHONE AND TELEGRAPH COMPANY NETWORKED TELECOMMUNICATIONS FOR THOSE WHO MIGHT NOT REMEMBER BLOCKCHAINLAWCLASS.COM

Slide 19

Slide 19 text

MORSE AND THE TELEGRAPH COULD QUICKLY PASS MESSAGES OVER LONG GEOGRAPHIC DISTANCES BLOCKCHAINLAWCLASS.COM

Slide 20

Slide 20 text

MORSE AND THE TELEGRAPH THIS INVENTION INCREASED THE ACCURACY AND SPEED OF INFORMATION FLOW BLOCKCHAINLAWCLASS.COM

Slide 21

Slide 21 text

TELEPHONE WAS A CONTINUATION OF THESE TRENDS ALEXANDER GRAHAM BELL'S TELEPHONE PATENT DRAWING, MARCH 7, 1876 BLOCKCHAINLAWCLASS.COM

Slide 22

Slide 22 text

AUTOMOBILES FURTHER REDUCED THE DISTANCE BETWEEN INDIVIDUALS BLOCKCHAINLAWCLASS.COM

Slide 23

Slide 23 text

THE EARLIEST COMPUTING HUMANS WERE THE ORIGINAL COMPUTERS BLOCKCHAINLAWCLASS.COM

Slide 24

Slide 24 text

ANALOG COMPUTING MACHINE AT THE LEWIS FLIGHT PROPULSION LABORATORY CIRCA 1949 (VIA WIKIPEDIA) HTTPS://EN.WIKIPEDIA.ORG/WIKI/ANALOG_COMPUTER BLOCKCHAINLAWCLASS.COM

Slide 25

Slide 25 text

No content

Slide 26

Slide 26 text

DIGITAL ERA

Slide 27

Slide 27 text

TELEGRAPH TELEPHONES INTERNET LONG TAIL COMMERCE (MERCHANT LAW TAKE 2) ANALOG ERA DIGITAL ERA FIAT CURRENCY EARLY COMPUTERS GLOBALIZATION PERSONAL COMPUTERS AUTOMOBILE CREDIT CARDS CHARGE CARDS

Slide 28

Slide 28 text

WE CALL THIS THE ANALOG ERA BECAUSE ANALOG COMPUTING BECOMES DIGITAL COMPUTING …

Slide 29

Slide 29 text

ANALOG COMPUTING MACHINE AT THE LEWIS FLIGHT PROPULSION LABORATORY CIRCA 1949 (VIA WIKIPEDIA) HTTPS://EN.WIKIPEDIA.ORG/WIKI/ANALOG_COMPUTER BLOCKCHAINLAWCLASS.COM

Slide 30

Slide 30 text

EARLY DIGITAL COMPUTING HTTPS://EN.WIKIPEDIA.ORG/WIKI/ HISTORY_OF_COMPUTING_HARDWARE#EARLY_DIGITAL_COMPUTER_CHARACTERISTICS BLOCKCHAINLAWCLASS.COM

Slide 31

Slide 31 text

EARLY DIGITAL COMPUTING HTTPS://EN.WIKIPEDIA.ORG/WIKI/HARVARD_MARK_I BLOCKCHAINLAWCLASS.COM

Slide 32

Slide 32 text

EARLY DIGITAL COMPUTING HTTPS://EN.WIKIPEDIA.ORG/WIKI/HARVARD_MARK_I BLOCKCHAINLAWCLASS.COM

Slide 33

Slide 33 text

PERSONAL COMPUTING BLOCKCHAINLAWCLASS.COM

Slide 34

Slide 34 text

MOORE’S LAW ! WE OBTAIN MASSIVE GAINS IN PROCESSOR SPEED BLOCKCHAINLAWCLASS.COM

Slide 35

Slide 35 text

WE OBTAIN MASSIVE DECREASES IN DATA STORAGE COSTS Kryder’s Law ! BLOCKCHAINLAWCLASS.COM

Slide 36

Slide 36 text

AND THEN WE GO NANO … BLOCKCHAINLAWCLASS.COM

Slide 37

Slide 37 text

COMPUTERS BECOME CONNECTED https://www.youtube.com/watch?v=UlJku_CSyNg THIS IS WHAT MUCH OF THE BLOCKCHAIN CONVERSATION SOUNDS LIKE TODAY BLOCKCHAINLAWCLASS.COM

Slide 38

Slide 38 text

AMONG THE TRANSITIONS, WE SEEK TO TAKE OUR PHYSICAL MARKETPLACES AND MOVE THEM INTO THE DIGITAL SPHERE … BLOCKCHAINLAWCLASS.COM

Slide 39

Slide 39 text

WE ARE ABLE TO LEVERAGE THE INTERNET TO EXPAND COMMERCE BY LOWERING THE TRANSACTION COSTS ASSOCIATED WITH FINDING BUYERS BLOCKCHAINLAWCLASS.COM

Slide 40

Slide 40 text

“TRADITIONAL RETAIL ECONOMICS DICTATE THAT STORES ONLY STOCK THE LIKELY HITS, BECAUSE SHELF SPACE IS EXPENSIVE. BUT ONLINE RETAILERS (FROM AMAZON TO ITUNES) CAN STOCK VIRTUALLY EVERYTHING, AND THE NUMBER OF AVAILABLE NICHE PRODUCTS OUTNUMBER THE HITS BY SEVERAL ORDERS OF MAGNITUDE. THOSE MILLIONS OF NICHES ARE THE LONG TAIL, WHICH HAD BEEN LARGELY NEGLECTED UNTIL RECENTLY IN FAVOR OF THE SHORT HEAD OF HITS.” BLOCKCHAINLAWCLASS.COM

Slide 41

Slide 41 text

BUT TO DO SO WE HAD TO GRAFT OUR ANALOG INSTITUTIONS FOR AN ONLINE DIGITAL WORLD … BLOCKCHAINLAWCLASS.COM

Slide 42

Slide 42 text

MERCHANT LAW (TAKE 2)

Slide 43

Slide 43 text

THERE IS A MODERN VERSION OF LEX MERCATORIA BLOCKCHAINLAWCLASS.COM

Slide 44

Slide 44 text

Mark Twain** **It is a quote that has been attributed to Mark Twain “HISTORY DOESN'T REPEAT ITSELF - BUT IT OFTEN RHYMES”

Slide 45

Slide 45 text

HOW DO DISTANT STRANGERS PAY EACH OTHER VIA THE INTERNET? PETER THIEL AND ELON MUSK PAYPAL IN 2000 BLOCKCHAINLAWCLASS.COM

Slide 46

Slide 46 text

ONLINE COMMERCE REQUIRES LOW FRICTION METHOD FOR RESOLVING DISPUTES SECURE PAYMENT BLOCKCHAINLAWCLASS.COM

Slide 47

Slide 47 text

BLOCKCHAINLAWCLASS.COM

Slide 48

Slide 48 text

BLOCKCHAINLAWCLASS.COM

Slide 49

Slide 49 text


 (BECAUSE IT COMBINES IDEAS FROM THE DIGITAL AND COMPUTATIONAL ERA) BLOCKCHAINLAWCLASS.COM MODRIA COULD BE CALLED AN EARLY COMPUTATIONAL ERA COMPANY

Slide 50

Slide 50 text

BLOCKCHAINLAWCLASS.COM 
 TYLER TECH IS THE LARGEST PLAYER IN COURT INFORMATION TECHNOLOGY SPHERE https://www.tylertech.com/solutions-products/modria

Slide 51

Slide 51 text

BLOCKCHAINLAWCLASS.COM MODRIA WAS SOLD TO TYLER TECH https://www.tylertech.com/solutions-products/modria

Slide 52

Slide 52 text

No content

Slide 53

Slide 53 text

COMPUTATIONAL ERA

Slide 54

Slide 54 text

THERE ARE A VARIETY OF DIFFERENT WAYS TO DIVIDE UP RECENT HISTORY AND PROJECT FORWARD … BLOCKCHAINLAWCLASS.COM

Slide 55

Slide 55 text

THE WORLD ECONOMIC FORUM CALLS THIS THE ‘FOURTH INDUSTRIAL REVOLUTION’ BLOCKCHAINLAWCLASS.COM

Slide 56

Slide 56 text

BLOCKCHAINLAWCLASS.COM

Slide 57

Slide 57 text

WE WOULD CALL IT THE COMPUTATIONAL AGE … BLOCKCHAINLAWCLASS.COM

Slide 58

Slide 58 text

IN OTHER WORDS, THIS IS NO LONGER THE DIGITAL AGE BUT RATHER THE EARLY COMPUTATIONAL AGE BLOCKCHAINLAWCLASS.COM

Slide 59

Slide 59 text

SOME OF THE INGREDIENTS OF THE COMPUTATIONAL ERA … BLOCKCHAINLAWCLASS.COM

Slide 60

Slide 60 text

CRYPTO INFRASTRUCTURE INTERNET OF THINGS ARTIFICIAL INTELLIGENCE + + ETC. + { } BLOCKCHAINLAWCLASS.COM

Slide 61

Slide 61 text

TELEGRAPH TELEPHONES INTERNET LONG TAIL COMMERCE (MERCHANT LAW TAKE 2) CRYPTO INFRASTRUCTURE ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA INTERNET OF THINGS FIAT CURRENCY EARLY COMPUTERS GLOBALIZATION PERSONAL COMPUTERS ARTIFICAL INTELLIGENCE AUTOMOBILE CREDIT CARDS CHARGE CARDS BLOCKCHAINLAWCLASS.COM

Slide 62

Slide 62 text

INDEED HERE IS THE KATZ, BOMMARITO + ZELNER BLOG WHICH HAS BEEN RUN SINCE 2009 (FEEL FREE TO SET THIS AS YOUR HOMEPAGE) HTTPS://COMPUTATIONALLEGALSTUDIES.COM/ BLOCKCHAINLAWCLASS.COM

Slide 63

Slide 63 text

No content

Slide 64

Slide 64 text

YOU CAN THINK OF EVERY INDIVIDUAL AND/ OR PROCESS AS A FORM OF COMPUTATION … BLOCKCHAINLAWCLASS.COM

Slide 65

Slide 65 text

INDEED THERE ARE STRONG VIEWS AT THE BOUNDARY OF PHYSICS AND PHILOSOPHY WHICH EXPLORE THE NOTION OF ‘UNIVERSAL COMPUTATION’ BLOCKCHAINLAWCLASS.COM

Slide 66

Slide 66 text

BLOCKCHAINLAWCLASS.COM

Slide 67

Slide 67 text

“ …. The third interpretation, which of course is more controversial, arises if we imagine that the universe is itself a computer and that what it's doing is performing a computation. If this is the case, these numbers say how big that computation is — how many ops have been performed on how many bits within the horizon since the universe began. That, of course, is more controversial, and since publishing this paper I've received what is charitably described as "hate mail" from famous scientists.” https://www.edge.org/conversation/seth_lloyd-the-computational-universe Seth Lloyd, MIT Physics Interview on Edge.org

Slide 68

Slide 68 text

ALTHOUGH THEY HAVE BEEN GUIDED BY OR CONSTRAINED BY RULES (NORMS AS WELL) … BLOCKCHAINLAWCLASS.COM

Slide 69

Slide 69 text

OUTSIDE OF THE CONTEXT OF BIOLOGY AND PHYSICS … MOST INSTITUTIONS PERFORM WHAT MIGHT BE CALLED COMPUTATION BLOCKCHAINLAWCLASS.COM

Slide 70

Slide 70 text

THE DECISION MAKING IN SUCH INSTITUTIONS HAS BEEN LARGELY OR EXCLUSIVELY HUMAN CENTRIC BLOCKCHAINLAWCLASS.COM

Slide 71

Slide 71 text

THE RISE OF COMPUTATIONAL AGE IS IN PART ABOUT RECONSIDERING THE ROLE OF HUMAN CENTRIC EXPERTISE … BLOCKCHAINLAWCLASS.COM

Slide 72

Slide 72 text

AND PERHAPS THE IMPLEMENTATION OF VARIOUS RULES … BLOCKCHAINLAWCLASS.COM

Slide 73

Slide 73 text

THERE IS A THEORETICAL IDEA OF LAW AS CODE BLOCKCHAINLAWCLASS.COM

Slide 74

Slide 74 text

EVEN MORE COMPELLING IS CODE AS LAW https://www.slideshare.net/mjbommar/university- of-houston-law-and-computation-workshop #COMPUTATIONALLAW #IMPLEMENTATION #ENGINEERING (PRIVATE LAW OR PUBLIC LAW) BLOCKCHAINLAWCLASS.COM

Slide 75

Slide 75 text

STILL EARLY DAYS BUT COMPUTATIONAL LAW IS GETTING SOME TRACTION

Slide 76

Slide 76 text

STILL EARLY DAYS BUT COMPUTATIONAL LAW IS GETTING SOME TRACTION https://www.thelawlabchannel.com/eric- wood-contracts-code-and-automation BLOCKCHAINLAWCLASS.COM ERIC WOOD CHAPMAN AND CUTLER

Slide 77

Slide 77 text

CONFERENCE AT INTERSECTION OF LAW, FINANCE + TECH FinLegalTechConference.com

Slide 78

Slide 78 text

No content

Slide 79

Slide 79 text

ANALOG DIGITAL COMPUTATIONAL

Slide 80

Slide 80 text

THESE PHASES MAP REASONABLY WELL ON TO WHAT WE HAVE SEEN (AND WILL LIKELY SOON SEE) IN THE FIELD OF LEGAL INNOVATION

Slide 81

Slide 81 text

COMPUTATIONAL Chaos + Complexity Process + Predictability Reinvention + Value Creation ANALOG DIGITAL

Slide 82

Slide 82 text

(1) CONTRACTS / TRANSACTIONS

Slide 83

Slide 83 text

CHAOS + COMPLEXITY

Slide 84

Slide 84 text

CHAOS + COMPLEXITY PROCESS + PREDICTABILITY

Slide 85

Slide 85 text

Contract Management Dashboard Open Contracts for Review 150 11.7% compared to 170 this time last year Contracts by Type NDA’s Master Service Agreements Contracts Reviewed (YTD) 1798 9.3.% compared to 1983 this time last year Input Risk Mitigated $6.4M 30.0% compared to $5M this time last year Average Cycle Time (YTD) 19 days 26.7% compared to 15 days last year Total Value of All Contracts $600.2M 29.6% compared to $500M this time last year Software Licenses Sales Agreements 602 426 246 312 Global Filters from 01/01/2017 Status to 12/31/2017 Practice Matter Type 0 7 13 20 26 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Average Contract Cycle Time Agreement Name Agreement Type Days Since Receipt Division Contracts by Complexity Low Medium High 48% 37% 15% Contracts Awaiting Review NDA Software License NDA Sales Agreement MSA John Smith HR Packet MS Jane Jones HR Packet Widget Agreement Acme Services HR IT HR Sales Team IT 3 29 8 37 56

Slide 86

Slide 86 text

WHILE THIS IS A HELPFUL STEP IT IS NOT REINVENTION

Slide 87

Slide 87 text

AN EXAMPLE OF REINVENTION

Slide 88

Slide 88 text

https://medium.com/aigang-network/the-synergy- between-insurance-and-blockchain-77da2849c211

Slide 89

Slide 89 text

“WEATHER INDEXED INSURANCE IS BASED ON LOCAL WEATHER INDICES. PAYOUTS ARE TRIGGERED BY THE SPECIFIED COMPONENTS OF THE INDEX RATHER THAN CROP YIELDS” https://wrma.org/weather-risk-by-application/agriculture/

Slide 90

Slide 90 text

INSURANCE CONTRACT CONTINGENCY STORED ON BLOCKCHAIN RAW SENSOR DATA (PRIVATE OR PUBLIC) PREPROCESSED AND SERVED UP REGULARLY CHECK FOR CONTINGENCY SATISFACTION IF CONTINGENCY IS SATISFIED INITIATE PAYMENT OR START AUDIT PROTOCOL OR PROCEED TO FINAL HUMAN APPROVAL

Slide 91

Slide 91 text

No content

Slide 92

Slide 92 text

THERE ARE A SIGNIFICANT NUMBER OF OTHER POTENTIAL EXAMPLES …

Slide 93

Slide 93 text

REMEMBER IT IS THE COMBINATION WHICH IS PARTICULARLY POTENT … BLOCKCHAINLAWCLASS.COM

Slide 94

Slide 94 text

https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services

Slide 95

Slide 95 text

HERE ARE JUST A FEW MORE IDEAS TO CONSIDER … (IN VARYING LEVELS OF DETAIL)

Slide 96

Slide 96 text

ALLOWING RECORDS TO TALK TO ONE ANOTHER

Slide 97

Slide 97 text

DISTRIBUTION WITHOUT CENTRAL INSTITUTIONS

Slide 98

Slide 98 text

MODERNIZING PAYMENT TECHNOLOGY HTTPS://WWW.AMERICANEXPRESS.COM/US/CONTENT/FOREIGN-EXCHANGE/ARTICLES/CAN- BLOCKCHAIN-ELIMINATE-FRAUD-IN-PAYMENT-PROCESSING-SERVICES/

Slide 99

Slide 99 text

INSTITUTIONS INCLUDING CORPORATIONS WITH SEMI TRANSPARENT INFRASTRUCTURE BY DESIGN

Slide 100

Slide 100 text

MARKET(S) FOR ORACLES

Slide 101

Slide 101 text

FINAL THOUGHTS

Slide 102

Slide 102 text

THE QUESTION TO ASK — WHERE IS THERE UNNECESSARY TRANSACTIONAL FRICTION ? BLOCKCHAINLAWCLASS.COM

Slide 103

Slide 103 text

WHERE IS THERE A CLASS OF ECONOMIC ACTIVITY WHICH HAS DIFFICULTY OCCURRING DUE TO AN INABILITY TO SCALE TRUST ? BLOCKCHAINLAWCLASS.COM

Slide 104

Slide 104 text

HOW COULD WE DEVELOP SEMI-AUTONOMOUS SYSTEMS THAT CAN REPLACE OR AUGMENT HUMAN COMPUTATION ? BLOCKCHAINLAWCLASS.COM

Slide 105

Slide 105 text

HOW CAN WE REINVENT THE EXISTING INFRASTRUCTURE TO SUPPORT NEW FORMS OF ECONOMIC, SOCIAL AND/OR POLITICAL ENGAGEMENT? BLOCKCHAINLAWCLASS.COM

Slide 106

Slide 106 text

THIS BRINGS US FULL CIRCLE TO CRYPTO / BLOCKCHAIN WHICH IS THE FOCUS OF OUR COURSE BLOCKCHAINLAWCLASS.COM

Slide 107

Slide 107 text

BLOCKCHAINLAWCLASS.COM FOR MORE MODULES VISIT

Slide 108

Slide 108 text

DANIEL MARTIN KATZ E D U | I L L I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW

Slide 109

Slide 109 text

@ computational professor daniel martin katz danielmartinkatz.com BLOCKCHAIN, CRYPTOCURRENCY AND LAW professor nelson rosario FROM ANALOG TO DIGITAL TO COMPUTATIONALLY INFUSED INSTITUTIONS nelsonmrosario.com @ nelsonmrosario BLOCKCHAINLAWCLASS.COM