Analog, Digital + Computational Institutions

This module will continue our exploration of the transaction cost view of economic history. The past 150 years can be divided into three eras — the analog era, the digital era and the computational era. v1.02

Transcript

1. @ 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
2. 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
3. CRYPTO TECH (BLOCKCHAIN) SOLVES FOR A SET OF LATENT TRUST PROBLEMS WHICH ARE STILL PRESENT IN A VARIETY OF CONTEXTS … BLOCKCHAINLAWCLASS.COM
4. AS HIGHLIGHTED IN EARLIER SESSIONS, CRYPTO TECH (BLOCKCHAIN) IS REALLY THE NOVEL COMBINATION OF SEVERAL EXISTING IDEAS AND TECHNOLOGIES … BLOCKCHAINLAWCLASS.COM
5. WE HAVE PREVIOUSLY HIGHLIGHTED SOME IMPORTANT HISTORICAL EXAMPLES FROM THE PRE-ANALOG ERA … BLOCKCHAINLAWCLASS.COM
6. IN EACH OF THESE EXAMPLES WE HAVE BEEN ABLE TO LOWER TRANSACTION COSTS AND THEREBY EXTEND THE AMOUNT OF TRANSACTING … BLOCKCHAINLAWCLASS.COM
7. 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
8. THREE RECENT ERAS
9. WE COULD DIVIDE UP THE PAST ~150 YEARS INTO THREE SEPARATE ERAS ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA BLOCKCHAINLAWCLASS.COM
10. IN THE THREE MOST RECENT ERAS THERE ARE A VARIETY OF TRENDS WHICH ULTIMATELY LEAD US TO THE PRESENT … BLOCKCHAINLAWCLASS.COM
11. EACH ERA LAYERS UPON THE PRIOR PERIODS … ANALOG ERA DIGITAL ERA COMPUTATIONAL ERA BLOCKCHAINLAWCLASS.COM
12. OR ALTERNATIVELY CAN BE THOUGHT OF AS A COMBINATORIC IDEA REMIX ELEMENTS OF THESE TRENDS ARE COMBINATORIALLY REMIXED IN VARIOUS NOVEL WAYS BLOCKCHAINLAWCLASS.COM
13. BLOCKCHAINLAWCLASS.COM https://www.ted.com/talks/matt_ridley_when_ideas_have_sex MATT RIDLEY - WHEN IDEAS HAVE SEX
14. 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
16. ANALOG ERA
17. TELEGRAPH TELEPHONES ANALOG ERA EARLY COMPUTERS AUTOMOBILE CHARGE CARDS
18. AT&T WAS ACTUALLY - AMERICAN TELEPHONE AND TELEGRAPH COMPANY NETWORKED TELECOMMUNICATIONS FOR THOSE WHO MIGHT NOT REMEMBER BLOCKCHAINLAWCLASS.COM
19. MORSE AND THE TELEGRAPH COULD QUICKLY PASS MESSAGES OVER LONG GEOGRAPHIC DISTANCES BLOCKCHAINLAWCLASS.COM
20. MORSE AND THE TELEGRAPH THIS INVENTION INCREASED THE ACCURACY AND SPEED OF INFORMATION FLOW BLOCKCHAINLAWCLASS.COM
21. TELEPHONE WAS A CONTINUATION OF THESE TRENDS ALEXANDER GRAHAM BELL'S TELEPHONE PATENT DRAWING, MARCH 7, 1876 BLOCKCHAINLAWCLASS.COM
22. AUTOMOBILES FURTHER REDUCED THE DISTANCE BETWEEN INDIVIDUALS BLOCKCHAINLAWCLASS.COM
23. THE EARLIEST COMPUTING HUMANS WERE THE ORIGINAL COMPUTERS BLOCKCHAINLAWCLASS.COM
24. ANALOG COMPUTING MACHINE AT THE LEWIS FLIGHT PROPULSION LABORATORY CIRCA 1949 (VIA WIKIPEDIA) HTTPS://EN.WIKIPEDIA.ORG/WIKI/ANALOG_COMPUTER BLOCKCHAINLAWCLASS.COM
26. DIGITAL ERA
27. 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
28. WE CALL THIS THE ANALOG ERA BECAUSE ANALOG COMPUTING BECOMES DIGITAL COMPUTING …
29. ANALOG COMPUTING MACHINE AT THE LEWIS FLIGHT PROPULSION LABORATORY CIRCA 1949 (VIA WIKIPEDIA) HTTPS://EN.WIKIPEDIA.ORG/WIKI/ANALOG_COMPUTER BLOCKCHAINLAWCLASS.COM
30. EARLY DIGITAL COMPUTING HTTPS://EN.WIKIPEDIA.ORG/WIKI/ HISTORY_OF_COMPUTING_HARDWARE#EARLY_DIGITAL_COMPUTER_CHARACTERISTICS BLOCKCHAINLAWCLASS.COM
31. EARLY DIGITAL COMPUTING HTTPS://EN.WIKIPEDIA.ORG/WIKI/HARVARD_MARK_I BLOCKCHAINLAWCLASS.COM
32. EARLY DIGITAL COMPUTING HTTPS://EN.WIKIPEDIA.ORG/WIKI/HARVARD_MARK_I BLOCKCHAINLAWCLASS.COM
33. PERSONAL COMPUTING BLOCKCHAINLAWCLASS.COM
34. MOORE’S LAW ! WE OBTAIN MASSIVE GAINS IN PROCESSOR SPEED BLOCKCHAINLAWCLASS.COM
35. WE OBTAIN MASSIVE DECREASES IN DATA STORAGE COSTS Kryder’s Law ! BLOCKCHAINLAWCLASS.COM
36. AND THEN WE GO NANO … BLOCKCHAINLAWCLASS.COM
37. COMPUTERS BECOME CONNECTED https://www.youtube.com/watch?v=UlJku_CSyNg THIS IS WHAT MUCH OF THE BLOCKCHAIN CONVERSATION SOUNDS LIKE TODAY BLOCKCHAINLAWCLASS.COM
38. AMONG THE TRANSITIONS, WE SEEK TO TAKE OUR PHYSICAL MARKETPLACES AND MOVE THEM INTO THE DIGITAL SPHERE … BLOCKCHAINLAWCLASS.COM
39. WE ARE ABLE TO LEVERAGE THE INTERNET TO EXPAND COMMERCE BY LOWERING THE TRANSACTION COSTS ASSOCIATED WITH FINDING BUYERS BLOCKCHAINLAWCLASS.COM
40. “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
41. BUT TO DO SO WE HAD TO GRAFT OUR ANALOG INSTITUTIONS FOR AN ONLINE DIGITAL WORLD … BLOCKCHAINLAWCLASS.COM
42. MERCHANT LAW (TAKE 2)
43. THERE IS A MODERN VERSION OF LEX MERCATORIA BLOCKCHAINLAWCLASS.COM
44. Mark Twain** **It is a quote that has been attributed to Mark Twain “HISTORY DOESN'T REPEAT ITSELF - BUT IT OFTEN RHYMES”
45. HOW DO DISTANT STRANGERS PAY EACH OTHER VIA THE INTERNET? PETER THIEL AND ELON MUSK PAYPAL IN 2000 BLOCKCHAINLAWCLASS.COM
46. ONLINE COMMERCE REQUIRES LOW FRICTION METHOD FOR RESOLVING DISPUTES SECURE PAYMENT BLOCKCHAINLAWCLASS.COM
47. BLOCKCHAINLAWCLASS.COM
48. BLOCKCHAINLAWCLASS.COM
49. 
 (BECAUSE IT COMBINES IDEAS FROM THE DIGITAL AND COMPUTATIONAL ERA) BLOCKCHAINLAWCLASS.COM MODRIA COULD BE CALLED AN EARLY COMPUTATIONAL ERA COMPANY
50. BLOCKCHAINLAWCLASS.COM 
 TYLER TECH IS THE LARGEST PLAYER IN COURT INFORMATION TECHNOLOGY SPHERE https://www.tylertech.com/solutions-products/modria
51. BLOCKCHAINLAWCLASS.COM MODRIA WAS SOLD TO TYLER TECH https://www.tylertech.com/solutions-products/modria
53. COMPUTATIONAL ERA
54. THERE ARE A VARIETY OF DIFFERENT WAYS TO DIVIDE UP RECENT HISTORY AND PROJECT FORWARD … BLOCKCHAINLAWCLASS.COM
55. THE WORLD ECONOMIC FORUM CALLS THIS THE ‘FOURTH INDUSTRIAL REVOLUTION’ BLOCKCHAINLAWCLASS.COM
56. BLOCKCHAINLAWCLASS.COM
57. WE WOULD CALL IT THE COMPUTATIONAL AGE … BLOCKCHAINLAWCLASS.COM
58. IN OTHER WORDS, THIS IS NO LONGER THE DIGITAL AGE BUT RATHER THE EARLY COMPUTATIONAL AGE BLOCKCHAINLAWCLASS.COM
59. SOME OF THE INGREDIENTS OF THE COMPUTATIONAL ERA … BLOCKCHAINLAWCLASS.COM
60. CRYPTO INFRASTRUCTURE INTERNET OF THINGS ARTIFICIAL INTELLIGENCE + + ETC. + { } BLOCKCHAINLAWCLASS.COM
61. 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
62. 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
64. YOU CAN THINK OF EVERY INDIVIDUAL AND/ OR PROCESS AS A FORM OF COMPUTATION … BLOCKCHAINLAWCLASS.COM
65. INDEED THERE ARE STRONG VIEWS AT THE BOUNDARY OF PHYSICS AND PHILOSOPHY WHICH EXPLORE THE NOTION OF ‘UNIVERSAL COMPUTATION’ BLOCKCHAINLAWCLASS.COM
66. BLOCKCHAINLAWCLASS.COM
67. “ …. 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
68. ALTHOUGH THEY HAVE BEEN GUIDED BY OR CONSTRAINED BY RULES (NORMS AS WELL) … BLOCKCHAINLAWCLASS.COM
69. OUTSIDE OF THE CONTEXT OF BIOLOGY AND PHYSICS … MOST INSTITUTIONS PERFORM WHAT MIGHT BE CALLED COMPUTATION BLOCKCHAINLAWCLASS.COM
70. THE DECISION MAKING IN SUCH INSTITUTIONS HAS BEEN LARGELY OR EXCLUSIVELY HUMAN CENTRIC BLOCKCHAINLAWCLASS.COM
71. THE RISE OF COMPUTATIONAL AGE IS IN PART ABOUT RECONSIDERING THE ROLE OF HUMAN CENTRIC EXPERTISE … BLOCKCHAINLAWCLASS.COM
72. AND PERHAPS THE IMPLEMENTATION OF VARIOUS RULES … BLOCKCHAINLAWCLASS.COM
73. THERE IS A THEORETICAL IDEA OF LAW AS CODE BLOCKCHAINLAWCLASS.COM
74. 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
75. STILL EARLY DAYS BUT COMPUTATIONAL LAW IS GETTING SOME TRACTION
76. 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
77. CONFERENCE AT INTERSECTION OF LAW, FINANCE + TECH FinLegalTechConference.com
79. ANALOG DIGITAL COMPUTATIONAL
80. THESE PHASES MAP REASONABLY WELL ON TO WHAT WE HAVE SEEN (AND WILL LIKELY SOON SEE) IN THE FIELD OF LEGAL INNOVATION
81. COMPUTATIONAL Chaos + Complexity Process + Predictability Reinvention + Value Creation ANALOG DIGITAL
82. (1) CONTRACTS / TRANSACTIONS
83. CHAOS + COMPLEXITY
84. CHAOS + COMPLEXITY PROCESS + PREDICTABILITY
85. 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
86. WHILE THIS IS A HELPFUL STEP IT IS NOT REINVENTION
87. AN EXAMPLE OF REINVENTION
88. https://medium.com/aigang-network/the-synergy- between-insurance-and-blockchain-77da2849c211
89. “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/
90. 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
92. THERE ARE A SIGNIFICANT NUMBER OF OTHER POTENTIAL EXAMPLES …
93. REMEMBER IT IS THE COMBINATION WHICH IS PARTICULARLY POTENT … BLOCKCHAINLAWCLASS.COM
94. https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services
95. HERE ARE JUST A FEW MORE IDEAS TO CONSIDER … (IN VARYING LEVELS OF DETAIL)
96. ALLOWING RECORDS TO TALK TO ONE ANOTHER
97. DISTRIBUTION WITHOUT CENTRAL INSTITUTIONS
98. MODERNIZING PAYMENT TECHNOLOGY HTTPS://WWW.AMERICANEXPRESS.COM/US/CONTENT/FOREIGN-EXCHANGE/ARTICLES/CAN- BLOCKCHAIN-ELIMINATE-FRAUD-IN-PAYMENT-PROCESSING-SERVICES/
99. INSTITUTIONS INCLUDING CORPORATIONS WITH SEMI TRANSPARENT INFRASTRUCTURE BY DESIGN
100. MARKET(S) FOR ORACLES
101. FINAL THOUGHTS
102. THE QUESTION TO ASK — WHERE IS THERE UNNECESSARY TRANSACTIONAL FRICTION ? BLOCKCHAINLAWCLASS.COM
103. WHERE IS THERE A CLASS OF ECONOMIC ACTIVITY WHICH HAS DIFFICULTY OCCURRING DUE TO AN INABILITY TO SCALE TRUST ? BLOCKCHAINLAWCLASS.COM
104. HOW COULD WE DEVELOP SEMI-AUTONOMOUS SYSTEMS THAT CAN REPLACE OR AUGMENT HUMAN COMPUTATION ? BLOCKCHAINLAWCLASS.COM
105. HOW CAN WE REINVENT THE EXISTING INFRASTRUCTURE TO SUPPORT NEW FORMS OF ECONOMIC, SOCIAL AND/OR POLITICAL ENGAGEMENT? BLOCKCHAINLAWCLASS.COM
106. THIS BRINGS US FULL CIRCLE TO CRYPTO / BLOCKCHAIN WHICH IS THE FOCUS OF OUR COURSE BLOCKCHAINLAWCLASS.COM
107. BLOCKCHAINLAWCLASS.COM FOR MORE MODULES VISIT
108. 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
109. @ 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