# Blockchain & The Law: Interfacing the Rule of Law and the Rule of Code (Devcon5)

- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2020-10-09
- Duration: 1:23:44
- Topics: blockchain, smart contracts, distributed ledger, ethereum, Science & Technology
- Watch: https://streameth.org/watch/yt-yzTsWED6_34
- YouTube: https://www.youtube.com/watch?v=yzTsWED6_34

## Description

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https://archive.devcon.org/archive/watch/5/blockchain-and-the-law-interfacing-the-rule-of-law-and-the-rule-of-code

This panel will feature prominent members of the COALA (http://coala.global) community. It will address the work that is currently being undertaken at COALA, with regard to interfacing the blockchain world with the legal world. It will focus in particular on the notion of "alegality" and how we can create legal APIs in order to help blockchain-based systems interact with legal persons. It will also discuss the need for legal reforms in order to accommodate the new opportunities provided by blockchain technology, and how the notion of "functional equivalence" can be used as a means to rely on blockchain technology as a "regulatory technology" in order to achieve similar regulatory or policy obec

Speaker(s): Constance Choi, Rick Dudley, Silke Noa Elrifai, Maria Gomez, Kei Kreutler, Carla Reyes, Fennie Wang
Skill level: Beginner
Track: Society and Systems


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Devcon 5 was held in Osaka, Japan on Oct 8 - 11, 2019.
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## Transcript

[Applause] the doors hello is yeah actually all right hi everyone Pamela's called long chain at the wall there's the subtitle on it I don't remember we'd all spend a lot of time together actually so this is like we just do this all the time anyway so somehow there's just a bunch of people in the room with us Anthony has like formal questions and stuff so yeah so I'm going to talk about watching the law and a lot of times [Music] [Music] I started out my legal career working BFF the Nagini fighting the good fight litigating a she's a first impression internet lost so issues that courts never seen before different technologies for you and then I worked for big law firms in cases for big tech companies before I discovered watching and Bitcoin mint lemon and I was tracking years and then now run this wonderful community of Palo which all these panelists are members and some of you guys for the audience we are a community of like-minded legal experts academics researchers economist technologists the little shebang and you get together at workshops and conferences across work rooms trying to solve deeply troubling issues that are common to us all works kinds of tools and how to develop policy and culture hi my name is reka ugly primarily what I do is a mechanism designer in the blockchain space so I have clients and I help them to build projects are runs into the lines so that they actually you really do fill the promise of equality and technology and safety guarantees that the users expect in that capacity I often times also have to make sure that the project is in some sense at least remotely peoplee compliant so I spend a lot of time discussing with you know various borders in various places how do we structure these things and mount on follow the law and so I actually really prior to that I was in Kuala and I still have in Kuala yeah the present tense um but yeah so so I'm mostly in Kuala I'm the non lawyer that most of the time so I'm helping people to understand the technology side the material side in particular and model independent my name is Sarah fight I'm the general counsel like what secret are you safe protection market protocols also my roads main is really made our products dispute assistance prior to turning nurses I went to protect and financial regulatory compliance also international arbitration my visa situation stab me so be our oyster [Music] and this is some strategy but I originally came to know that Republic from working on a small cooperative which I set up like articles of association or and tried to do distributed cooperative in 2014 and that community came to be an advisor and actually a member of the insurance and it's very database and they should be done we're just kind of in throwback now but I think that's why I came to know you guys so looking at a kind of model of too centralized stewardship on a human level of decentralized protocols and we eat the basket so my background is more in kind of writing and research practice rather than law specifically look at it so you know we have an outline probably want to keep it entirely mysteries but it will be someone but these veggies is sort of provide an introduction to what we think about salient legal questions in the blogging space which you may not be what you think are solutions and then we can sort of suss that out at the end but yeah let's start I mean anyone can sort of response to the question what is a big ality and so in in the sort of the blockchain space or talk about extra legal or unstoppable applications and oftentimes there's a evil undertone or legal subtext to those statements that is actually predicated in this concept of legality and it would be entirely unclear to hold a person or even some cases of the legal background oh what that means or how that applies so so what we mean by a legality is we're not talking about things that are illegal per se ie already defined you know by specific law or regulation we're not talking about things that are illegals illegalities is what we refer to as things that exist currently outside of the view of the law today so when we think about unstoppable code we often think Oh what we're really talking about is the blockchain reality and there is a lot in reality but we forget that there's also a physical legal reality so people participating in that code the development of the code people participating in the project all of whom have a legal and physical presence in the real world and so what we when we talk about illegality we are really trying to figure out how do we make this blockchain reality correspond and deal with this physical real reality legal reality real legal reality that exists for many of us who work in this case I think oh hey you gotta see is very easy to cross a few justice would refer to the order to just order them oh I'm ordered and we're basically in the space and I think in the lone I mean right now there's a lot of regulation and happening so the unordered space becoming that's an orange so it's more ordered or disordered depending where we study do you want to expand a bit on which one's ordered with one's unordered which ones disordered so from a regulatory perspective from the regulation anything that doesn't comply with the new overarching of overreaching regulation in several countries would be disparate and the unordered our a legal space becomes smaller and smaller but that is up to debate so might have a different of the nervous that's where the benefit of the audience is it not sure if there's in reality is as long as there's human interaction there's a set of even with you know kind of like police regulations what's the ground by which we operate together as whatever human interaction right so if I take a very common law approach I think about there's there's laws but there's also principles there's a constitutional right that's around the legality of all the subsequent laws that are enacted by Congress so there's a there's a pecking word but you start in the US legal culture we start with that we can Constitution which is a piece of literature as opposed to English Constitution under but it's a sin of those founding principles and on top of that we have lost cosmic congress and then on top of that we have regulations that are by unfortunately that interpret right so recently lots of log kind of falls that subspaces talk about things in a very concrete way as people know we're all scared of the sec world scared of enforcement actions right so they're operating that lumber and be kind of wanted people gap or were these ground includes apples that make that thank you justification for these subsequent regulations applause so I think you know Dells opportunity to think that relational aspects of human eruption and propose just a way of executing there's birds always we are always very to governments and so but that's why sometimes we say a legalities something that is not ordered but sometimes we find order committed from legal systems coming from there from the private parties so it doesn't mean that we are not ordered if it is outside the legal system or that they are no rules at all there are now this chain organizations these new systems they are self-organizing and trying to impose these or to create these new system that is parallel and it's outside of traditional just just one quick follow-up you know in terms of this kind of unordered space eventually that one ordered space becomes order there are forces that shaped the way laws form it's slow but when it moves it moves particular arc and without you know new kinds of projects and new kinds of thinking and innovation and what happens is that the kinds of forces that shape the political economy which lead to the loss that we then see later on are going to be in place so these are large table there's incumbents entire systems you know people that four main sources so when we say people often think oh if there isn't a particular law or a quarter long chain that means the law doesn't apply there are many areas of law that already apply that yet to be imposed as an ordering on the space and yet it will be ordered and and what we are really interested in as a community is how do we shape that ordering and that can be done through building new projects changing the market forces changing our collective culture and what everyone believes will work or won't work so all of these things are equally important as we look at whether laws do not exist that apply to us today through Maria like you had privately ordered space media trying to order ourselves at that order or my country was ordered by regulation but ordered by our stomach that is sanctioned by the state so as long as they they have he was working during as long as we could in self-regulation they don't interfere but if it were not what we do a mitten does effect I mean laws does come into the flight of a bird we might get into a conflict for the public space by statement so I think what we want to discuss here today also is what can you actually order privately what can you not order finally so I just want to also bring it back I feel like there's a common conception in the space that a legality and once translates to a kind of autonomous legality and if it was early on a misconception based on the term smart contracts that there is some type of contract laws on how it vetted and how these technical senses particles run when it actually is not once one gotcha so I think a lot of what you said about shaping the relational space where you have these principles and laws not always necessarily an external appeal so you were the baby not necessary on attained off change but if you kind of externally appeal to outside the community here like an extrajudicial force like what are the points of this contact so if you order yourself directly privately you can also strategically choose like what are the points of contact when the to secret court of law when you do see questions of liability and other questions a lot in large part concern about responsibility so I think that's a very good point and a good sort of transition I'm just going to quickly say I think the process that the blockchain can is experiencing now is you exist as a legal framework with like unawareness right means like your ignorance of the law you people don't know what the laws are they understand the wall works and they also coincidentally planned an especially interesting thing about the divorce Romania the hope some of us have landed very much squarely in the a medieval space where some of us have planned it very squarely in the illegal space for the same reason right you just you didn't you weren't aware of the law you weren't paying attention whatever and you just were doing your thing and some people thought the thing was going to be cool and they were really wrong and so we are as a community going through this process of ordering space and formalizing as a community what we're doing and the real risk is as a community if we start to again out of ignorance create ordering that is in conflict with the law right because what's going to happen is we're going to have a set of community norms that we won't believe are true and valid and evil again because people make fall outside of the government but we will informed a set of laws that are in conflict with the laws that we all operate under put it in a very concrete term it's great that we know this conference here and we're not like a biker gang right like a biker games have their own law they operate literally call themselves alcohols and have a law of averages and go to outlaw parties and like you know these parties are fun there's a lot of benefits and not being an outlaw party you know pros and cons right and so I think for most of us here in the blockchain space we're trying to align our ordering process with this other legal ordering process and so apropos of that I've been asked the next the next question and it's prompt which i think is something that oftentimes comes up in space and and also is a touches back to some of these other conversation about contracts and misuse of use of terms you know why can't we just make smart contracts between us and call it a day right like why is it that we can't um just have like these sort of weird computer mediated bilateral agreements that are you know interesting and unique in their own right but like why aren't these new forms of private agreements sufficient to protect our activity again as we sort of move through this unordered space into an order of space why isn't it sufficient or just you know three people in this room to get together at the throat you know throws computer and why isn't that like a sufficient protection and starting at our hospital basically the what I earlier spoke to spoke about is that information to business we are fine during private ordering as long as we don't violate the public with all the through law administered so that's what we have to talk about and the moment you do that you might not because here's this there's a train of thought in the space that everything can be quantified but smart content is really just enforcement piece the totality of attract relationship which include sound opponent like is there a meeting of the minds so there's this conflation that says the execution of some function with the enforcement of oscillation is also the evidence of tensions when in fact we have an outcome but the whole dispute between two people is whether or not that is the correct outcome that accords with the expectations of attorneys so that's necessarily if it's something that falls outside of the scope of the code write the code evidentiary or contentious prettier but it's not by itself that's totality of that of that relationship but what's the difference under the contract contract also contains many other provisions and there's also other activities that that can evidentiary rules right and so and I think that what we're really talking about there that depends between insert lay terms the difference between a smart contract and a written contract a paper contract is that when you go through the process of signing up a paper contract you've demonstrated some meeting of the minds already right and you've demonstrated that in some relationship to the greater of all like people don't say oh I sign this bowl it does happen actually where you have very ignorant people and they're like I sign this contract when I got some ice cream and then you're like okay well obviously that like failed to meet the qualifications of a legal contract and I think that what we have the blockchain Space Flight the concept of a legal contract and in light the concept of people agreement sort of just wished away the walls relationship you don't need every contract and sometimes people just send a guy with the ice cream it happens all the time I know see a difference of that I don't think the difference is in the sort of formal structure right the difference is he you know quite literally the minds of the people in the agreement right when we talk about people of this community making smart contracts with our contracting systems they are not well some of them are the person who's like oh I got some ice cream so I'd like to this token or whatever but a lot of the people really do our turning construct their intent is to create something that exists but they're necessary but I said that that feels a lot different and I am signed a contract for our employment or producing ones and it's also tenser very shortly one more reason why I think that the gallery and probably is not mentioned is something is hanging out with you guys I know there isn't necessarily the law there absolutely like a lot of laws and there isn't this sort of like that kind of locking protocol there a lot of technical disagreements about protocol upgrades so it's not laughing the motivated me that also makes it very difficult to catch the two up I'm so talk about international law given jurisdictions two concrete examples you know they're people for watching lots of people are participating you never would have the best of intentions all the sudden you have an assassination contract it's launched on a net and you thought you guys were just a group of people or you thought you were just contributing to a code for a particular project and all of a sudden the law sweeps in and apart from this blockchain reality and all the agreements you mean that then Dini of a general partner in a general partnership and liable for all the acts of everybody's participated so this is where it's really there's there's a visible legal reality with states nation states that have these supports that operate on your projects even if you can't see that us as I miss us and be encoded as my conscience we saw that message our format like humans so there are subjective constraints that are needed and that are impossible to qualified so - but I was talking before about self-governance and how we could create these rules in a way to you that they are problem with God is that whenever the design is beautiful and supple it - to decide what is according to those rules or not is very subjective and so that's why I just as much one of the solutions that worse with humans who decided what was if certain action within our organizations to those we can and the doctors a perfect example of that you know the attacker actually said or if the code is really long I followed the ball and thank you for all the money and actually the community decided that was not the outcome that they wanted they wanted to Gold is blockchains for contract reality so you know there's there's like human labor just as he said that that we need to take into account as we build this infrastructure that's ultimately meant to and just briefly I think it's interesting to note in the case of withou the reason the code wasn't ball was because you know the you know ultimately the issue that arose was not from the author of the contract that was exploited right the underlying issue was a mismatch between two parts of the stack below what that developer wrote and you can sort of get into this I mean I think that you know how much of a soft word anymore this is really fascinating philosophical discussion around programming languages and why would we ever want to use a language where it's such a problem and emerge right but here we are in reality where we have those languages and there's there's no way that you can legitimate the argue well okay there's conspiracy theories that are somewhat extreme but outside of those it's very clear that the intent of the original publishers of the dow was not to have the doll hack happen right so we can all look at that and agree i mean again the vast majority of the obviously not everyone but the vast majority of people can look at okay well the code that should be law is the code that actually like the person who wrote the code had an intent and that intent was clear in effect there was a bug an underlying food what obfuscated that intent and eight years having that sort of level of complexity in your discussion about code is law like if your code is that sophisticated which is actually like the vast majority of code the dollar wasn't a particularly sophisticated piece of software so if we can't express simple things like the Dow and its unambiguous terms then we're going to be stuck having humans try to mediate to resolve these issues in one form or another whether that's through like an Aragon sort of module or through something else Billy do you want to remember your question later and you can come back to it thank you one thing I wanted to say to that is the dart team could actually have made this a bigger contract it could have set up a contract saying code is law and maybe this legal system is a choice of law is England and Wales something else and then you know you should have had something kind of a backup so if you one code code is law you can set up a contract to actually state down all you need that in addition you need to have a legal system that catches all the other things that you have missed out on it yeah so I think for this community they're the reason people don't do that and again if you're not a lawyer that just seems like especially in America oh I don't know maybe lawyer I mean hopefully lawyers are expensive everywhere but you know just the shorter the distinct Curtis like we only with the countries where laws expensive have you know hopefully laws expensive everywhere and it's not only the expense that provides people inside me but it's like you're opening up this whole new world your basic because I mean this is so I think one of the things that it's easy to misunderstand if you're a layperson which is you know just because you don't know what the law is doesn't mean that you're not subject to the law you can't like plead ignorance to the law you can say oh I brought group I drove over this person collected knows and legal right and so on the scene being your suggestion is a perfectly reasonable suggestion as a lawyer which is I should provide myself some legal protection by these like writing something down and notarizing it but for other people they feel that that's like opening Pandora's Box that's inviting them all into their situation of making it worse not making it better I knew that I mean that's literally why we're here on this panel sort of dissuade people from that line of reasoning and if you wanna ticket stay away from any legal jurisdiction if you choose as your distributor solution arbitration you could also actually not take it to territorial jurisdiction as your choice of law you can actually change rules of law so if the eastern community with one you know like everyone right now scream something like that you could actually put that in there because most arbitration clause or international arbitration laws and now we're able to do that so different rates on the legal system ourself and refer to it in our contracts in our district resolution mechanism but we haven't done that far I mean we could do that I think it was a great idea great idea and we are actually working on this just on the arbitration New Jersey yeah so you cannot so I work about ten years of international arbitration and petty officer so we have a bit of a dispute on this question and my position one that says you cannot have a finite mandatory laws of Amina not his conscience I mean this is like torture or he cannot any human rights that are enshrined in international law but on the substantive level is not just procedural you can actually come up with your own words or not but we cannot miss an example for the non-lawyers about what some of these rules that you can make up which it would be like one cent I think that that's the best way the concepts how you give a concept in UK concept can be also I say hey it's good absolu it yes I'm actually not as American idea is is if you could say for example signature partners you're if you could say that the transaction the signature is the signature on that under your contract and then you wouldn't need to follow jurisdictional signature requirements and that would from something people you can very much adapt it to your own legal system you choose as for example I mean we worked on initializing the textile but we realized I mean isn't this system of rules we have that is being developed so it's because the existence so we had to look at interesting shouldn't get it had to take a choice of law of the jurisdiction zone you need interesting sure that has very that allows you to do this so it doesn't function in our restaurants yeah okay doesn't punch a non-jurisdictional sort of cut you off though that's why they're so we do have an agenda yeah Billy you're so close I'm gonna try [Music] I was going to talk about the misinterpretation of code is law from the non blockchain perspective of sort of the interpretation of law if it was to be interpreted as it was intended originally you know this is a big sort of debate in the Supreme Court in America and how else are like code is law and traditional law could be about really interpreting the actual English here anything that night and where that stands are how is that text opposed and today's current law climate yeah so we have long Guardians about this because technically I think I mean I guess there's a and this both in koala broadly go from all over the world right and so there's all different laws I mean this panel coincidentally is mostly I think US law but maybe not I mean I don't know what the split is and I can't count apparently but but yeah I mean there's definitely yeah so there's definitely I think a question around like in the u.s. context versus European context common law context context that's okay technically in that previous statement the UK is not part of the EU but yeah I think that there is minimal the lawyers actually answered I don't know who wants to want the answer of other lawyers so you know I don't know how many of you guys are familiar with Johnsbury Barlow's declaration of independence in cyberspace so this was you know what the internet was new and offices open free space free from nation-states and men and unfair enforcement mechanisms where we all learn and live and playing together on this wonderful world wide web and you know if you read it it's it's beautiful but it almost seems quaint today because eventually we realized that these networks that we created still were operated by people businesses who live in this little economy and shaped by the markets shaped by legal forces shaped by culture shaped by norms and that's how we see the Internet today which is very much not an independence sphere of cyberspace so when we say Buddhist law you know and we're kind of drawing on this very long tradition of technologists or people who are innovating at the edge of new technologies who think that may have somehow create an escape to law and created a space where they make their own and you know there's again there's there's a lot of split between different restrictions about how you know you know and operationalize that literally what that means in terms but in the broadest sense that we've been approaching this question is is it enough to make private agreements in technology or do we need to take the law all the laws and politics and the culture that come with the building of laws into anyone else title comments you know we don't we're skipping that so what we're going to do we put a single everyone sanity is imagine these two right next to each other are you in that length about common law and civil law and for all of you so we're skipping that so that's when though this question Billy would have an alternate reality I pass them the mic because argue about it no one wants to hear any other so okay we're not we're not doing that but this is an apropos the next question which is you know do we need to reform the law to do do these are legal reforms necessary for the community to achieve as desired goals I think it's probably the most insane way of putting that I need that time yeah does do we need legal reform to accomplish the community's goals I think we are just discarding we are justified as persons we have actually in a listener of organizations native as much contact native organizations we are just starting to have those people are just excited to work we use different tools and I think we I really believe that these new rules are going to come from this private sector first I always put this example of the exchange Expo it was initially called coffee house in the 18th century and that became what it is today the next change and so I really regret that these initial rules are going to come from us this initial system even hours of this coffee house were like private clubs in 18th century and the government they wanted to recognize those and they were not enforcing them so if people they organized they were enforcing those rules and that's how easy the uses of asthma and some private private governance is effective and I think it's going to be necessary now I think I disagree are we going to achieve as a community today writing different zeros probably not but I think we Robin the idea what people reform means and how do we shape the way the law is going to work now in the future I think we have enormous space a lot of areas of government such areas but you know we talk a lot about regulatory capture and market capture and these as we move from this unordered space into an order of space if we don't take a proactive approach to figuring out how do we make our processes sound how do we meet the kinds of goals that we all agree on you know protecting consumers in freedom to contract you know promoting innovation and creativity making sure from a lot to activities are conducted under networks if we can't come up with ways and means using the infrastructure that we have to deal with these problems the what will happen is as we move into this unordered into an ordered space the forces that always shape the way that entropy toward centralization the the forces that are that are powerful today will continue to share that in the future and we'll see what happens with the internet happening to to crypto and you're already seeing it with zebra and other so really need to figure out you know how do we as community build Road rules today while we still have space and capacity to do that as the law starts I think that's really correct and also what I see is one of the opportunities as an Aquarian and I think locked in is the only example of them but I think normally when we kind of choose terms of service or interactive software we feel like we're contract but in a case of more distributed systems you're kind of contracting with other things so and non-legal terms like that relational aspect of reorienting now interact with software to be more about kind of entering into agreement with a network of several different parties and have common responsibilities because whatever there's the tension point a lot of our conversations is how do you manage liability and responsibility and pseudonymity and that seems to be the kind of core tension of how to be introduced to a normal refined legal space like preserving the ability to interact strongly and while interacting responsibly and that's one of the major points for me and yeah it's just a sort of at the the sorry that we've actually but I mean you know we're also when you talk about you know anonymity and providing you know maintaining some sort of privacy part of that is also somewhat circularly to avoid exposing yourself to laws that you otherwise wouldn't be exposed to right and and and and also it even more to take that a step further you know not all walls are just right we don't all you know we all have our own sense of justice our own sense of morality and own sense of ethics and maybe I think it's hectic all too maybe everyone I know that the goal for me to do so many legal thing in some other country and in order for me to do that I need to protect my identity right to stop those people who are coming after me or you know of harming the current common phrase and I'm correct have you and so there I think there's a benefit when you're constantly thinking about like assassination markets and like kidnapping children and child porn and all this stuff but that same protection can work to actually create like a more just and ethical environment and especially [ __ ] about stuff like you know Aragon but you know the it's a lot of people to have an agreement that is more just than what they could actually get within a legal framework right and that's that's actually sort of the red ring for Y and DHS potentially engage in this process assets are beer asses whoever controls that acid the or the vs. register assets which means they they have to need so a lot Tripta masses are work are bigger assets that became as as the phonebook registered assets meaning that they became less carries in the sense that economic incentive tools but instead of seeing these certain classic books or names who are competitive can access that's that set of instruments we want everyone is we have to be able to access that and that's fundamentally opposed with how securities law functions where we're like you cannot be a very asset if you are security that's just part of the law you have to be registered there's there are these register regulated intermediaries that serve particular functions so I think that's a fundamental aspect of the law that needs to be changed and that also goes into corporate governance and who can participate in the governance of something that it doesn't quite look like the traditional operation we're trying to build public Commons digital Commons will be needing incentive mechanism that allows anyone to participate so it could be a repeater mode well that traditional looks like a security that is that means they're all these rules around a systemic so we constantly add heads freshen up that doesn't match and lawmakers are these the states aren't really going to do anything about it anytime soon so you have regulators like the SEC trying to figure out what's the best way to balance the space where for them it is a legal in the sense that they've got you know 50 60 70 years of securities law that says he's a security always a security business more they think that goes from security to non security so they kind of have to make that up then though they don't really have that kind of lawmaking power and this goes back to where does the legitimacy the logs were so they're kind of operating in that way yet and they're doing these for your sonís just trying to say okay you were early he didn't kind of know what the law was you're not you're doing something innovative that might bear lots of value so you're not going to cause more damage by shutting you down and preventing you from having this asset or you know you can kind of tour to pay and that's a cost of doing business in the space and we'll let you go and experiment like so there's so there's there's a real concrete link which I think very there's that friction and government agencies don't actually know they're they're actually in an a legal space where they don't know how to I just wanna die super quickly I really love the idea that what could be produced types of definitions of financial assets we also need to close regulation in the cows face because that our space have more more people are entering that the ecosystem they do not know most people do not know what to think liabilities are attached to that one example a lot of people do not think about it for example if you get a grant from a Dow and the Dow there's the tower's anonymous you do not know where the money actually comes from you might be implicating yourself in like terrorist financing activities just by taking the money so organizations that you know come you know if you have a company then you get money from from itaú in strict sense you would have to ask yourself well am I sure that this money is not coming from some terrorist organization or some organization that is in the eyes of some big government considered to be terrorists or AML related if you do that and keep up with where the place then you basically mind implications no one ever thinks about that and there other questions like that and because of that that needs to be a protection for the developers for the people actually in this race and we have the ones who have to propose it we are the ones have to propose as well to recognize it because if we don't do it they have other to respond so you have an opportunity here where the architecture of the law did not fit this new kind of architecture and there we tend to be a long mystical process how to develop how to how to make these things a consistent and in here we have the same problem we have laws that are based in Geographics real owners of jurisdictions that that there are centralized organizational structures of the board identified participants so you have laws that are all framed around this particular plumbing and then you have this technology that is labeling all sorts of different things people from all over the world to participate on projects and scale who then who still nevertheless live in some yummies addictions so so so right now there's a lot of belief that this can be a game changer and that means entities and organizations like agencies like the FCC are are taking a wait-and-see approach and taking these careful selective one-off steps to try to figure out how to deal with this because they actually don't know how so in a lot of people in the earliest cases I worked on in my career was the YouTube icon case he was an open question whether YouTube could exist and it was a negotiation of powers between the content creator between the copyright holders which are these large organizations you know and entities in Hollywood who had regulators politicians who largely get their money's worth water views what a reputation you had then also the fact that YouTube already existed with billions of users which was also a market for us and then we also had the narrative of what we want to protect whose rights are at stake do we want to promote creativity with this particular law you know stifle or promote creativity or protect copyright holder so right now we are in the same space where the things that were built the rules that were making amongst ourselves the products that we're building the values that we put behind those products are all going to have an impact on how law is reformed and how long it's being reformed today these are only either all things that we begin to wrap up the rest of our time with questions answers I don't know two people should probably try to walk up here because you're on the wire might to ask their questions or you know I guess or be very loud - and almost any new thing that gets created whether it's huge Aquarians in the air some twenty winner is about honesty like Chiclets so I was like people or the engineering side of the Builder sighs how should we like to think about that how should we think about sort of tension between like if you want to have innovation of course you know you're gonna end up not fitting in existing frameworks and and on a theorem we've seen specifically so [Music] [Music] always right and help you navigate this quarter so you know you know very well be at least about at least that you don't end up in here as long as you are protected that way I think that some lawyers can help you and I'm not saying we have any legal but you know it's it's really difficult it's it's the legal world is the world they don't know you're building something you wanted out so what do you do legal advice is very expensive or what does one do i what would be really great to see is have the community come together because these are issues that are actually common to everybody how do we solve this problem of maintaining responsibility while enabling these features that this technology so special and something and you know and one of these things is right now the regulator's don't do we have what to do can we come up as a community with sound practices that deal with the things that we that they and we care about how to deal with this technology responsibly how to have transparent processes so that there is an element or due process and informed participation these are rules that we can all meet together across projects today and that's okay so there's four oh all right conference main questions bro okay you're nuts my question goes back to some of the comments ever the lawyers made about getting out in front of the debate as influencing eight people so if they come and get us because I'm old enough to remember the Declaration of Independence of cyberspace the first time you know very Giants of flesh and steel and all of that but the basic ideas leave us alone but we've done they would leave us alone and we ended up with some bad laws the first time etc etc so my question is it's one thing to talk about you know come up with our own self-regulation our own processes but what specifically do you guys think could be done influenced hit use what okay let's say you know defining the debate governments regulators [Music] it's really interesting this self right much more a question and I'm always skeptical about what people's interests are so you might have seen in the less I think paper so something called encrypt era meters which is a from this collaborative all the big blocking guys where they promote the new big banks and invasive and you cover little like they decided that they were just going to great people we like you're a secure you're not security but if you're security you won't know is your show up on this thing and there's no disclosure of the conference of interest there's no transparency around the methodology but at the same time than these are folks with deep connections to Washington right so one basis but you see there's all these like just this intrigue of folks and we've seen also two hundred recent settlements but they asked to see that actually look very favorable he was kind of stopped by the rest it's just across the food business cheaper to do an IPO site site coin-sized funds they also got a 3d and I think light settlement but basically their therapy their security totally doesn't have it register so that's great it's really it's actually maybe open as well so there's there's something happening where I feel what it is that's going on behind the scenes right we're just people but there's something happening there are powers that and that are trying to negotiate some things but is it also very interests of what do I think you only waited to is to keep your head down and don't [ __ ] up just just nation that that were some people's that good there's actual adoption in this case outside up they're traitors and being a toy but make things that actually matter for people this is why we're building this new set of tools and that's that's the only way right that's the only way to make the case yeah we're not gonna be able to get to all these questions one yeah you proposed dealing with the clash between the public's public policy objective of national security and anti-crime national crime and on the other hand its civil liberties case for privacy and confidentiality that seems to be one of the biggest problems in the world upcoming years I think so how do you propose doing that from the ground up as seems to be the well I mean for me I have a different story about the stuff of mentality like like you know I don't think that the blockchain technology we have today is in any way inhibiting law enforcement it's certainly not more so than the cryptography in isolation right like if you just said okay cryptography is this as a as math in the universe right criminals have access to math and they can figure out how to encrypt things and that capability is going to be there I don't think that developing blockchain technology broadly speaking facilitates crime in the in this little bit pedantic but the law is a bit pedantic right me good that's the nature of playing the legal game I don't you know when Mexico the Mexican drug cartel was kidnapping telco workers to force them to build a radio network so that they could directly communicate each other to ship drugs no one pulled voter roll up into a corner and said what are you doing making these radio chips right they said oh yeah HSBC is for an example right I think that there's a legitimate understandable anxiety around this question but there's so many examples where if you weren't just being a criminal no one misses you needed crying to you and I think in our community that's something that people out to come to terms with it's like we have to separate out the criminal activity from the non criminal activity and then this conversation becomes much easier to have you know with emerging technologies the speed on that where we are at encryption is exactly but you know there is an opportunity for us to do some really interesting things with this technology that brings that will binary lays you're either you know if you have privacy you know you're gonna cut it against national security in order to have robust national security you know you you have to you know somehow give some civil liberties and someone said right to privacy and this zero-sum maybe can be broken because technology enables different things maybe what we could do is have decentralized identity networks that you seek ApS that allow people to have a token which doesn't share all your information and yet still allows people some some companies or organizations or towels to check the exact list against their participants make sure they're not obvious the name of the terrorist so that's one example one of the things that were able to answer question as well one of the things that were working on in Kuala is remaining a doubt model law so what this involves is looking at what are the goals behind the means the mechanisms that traditional legal frameworks require so it usually you know if you want to have legal standing capacity to sue or be sued to actually legally ordered an asset that's all chain these things usually require things like a traditional identification but behind those meetings there are some goals the policymakers are trying to achieve and what we're doing as a mapping exercise it's figuring out what one of these goals can be met through technological guarantees what what can we claim is a functional equivalent to this rule because actually I can't even follow those means anymore they don't exist sometimes mates and then to create from there still an alternative people framework that meets these public policy goals and with koala we have this wonderful benefit of having incredible minds from diverse backgrounds contributing to this project and also a very large academic network that gives tests to the fact that what we're doing is really a neutral fact-based analysis from how we think the world should go forward and then you know as we build this legitimacy and the chorus of voices - then socialize back with other stakeholders because people are you know they're very interested in listening this is an opportunity that we this is something new [Music] with it we have an opportunity to fill that vacuum with things that we can come up with oh and just the other workshop on Friday 9:00 to 10:30 [Music] perfect this was the next question yeah I truly was related to talk a bit about like being proactive the you know helping you know enforce regulations or being effective our dispensary I was wondering if there was me like large community effort to you know I have this conversation and kind of like something that can be quite answer so the question is are there any community young woman created in these days it's also a new one in that farts International Association of trusted blockchain applications they're just old this summer and close to us on what I've seen a lot of my legacy institutions such as bank banks the institution's big corporates who have a very different agenda we have so just trying to get a point across responsible we have many many from this ecosystem it's difficult because they they're dangerous very much cash so I think what we have to do as Mexico gather the people who are interested in this driving this overage within you know these this community and not with the corporates I mean you have to talk to them and we have to find common ground on we first need to know what do we know how much time Jimmy loves balloons I mean you get your best thing going for 20 minutes if you do you good stuff any time but I'm just saying you know about a minute if you need I mean these are more questions there's four more questions I'll just go front to back so you could share some example breakthroughs and blockchain of observation like specific example or today through love and are starting to allow for more innovation or innovation that efficient so it seems that at the moment it's always smaller states their smallest example I had done that I actually come up with new solutions to help the pocket chain space this is not necessarily a good solutions but they are solutions and what happens is you basically for example you have in the towers ratio of Malta they are in the process of clearing your personality to work house I do not necessarily agree with how I did it because what they do is like their make turn now into what is not like just a corporate entity other jurisdictions Switzerland has been very active in facilitating the crypto community and especially in relation to securities laws sometimes many because smaller states they in fact in a way the bigger states and hopefully they're infected with the right disease another wrong one other land Germany and other good examples of jurisdictions that's related that and it's now also we should mention Gibraltar very early in - regulatory framework which was principal his principal based so it's based on principle what you know it's technologically agnostic respect wide so they can just you know they can kind of innovate within those very principles but it might even also the ticket of Gibraltar they are overreaching on am now because they trying even to have two supplies pencils are to follow their laws which some people in the community supports all of a sudden but for us I think the goal would be to approach a smaller jurisdiction we write you know we draft something we think is good like something based on technology and other inventions and have that implemented in the smaller state and then hope that he catches on because that was the same way with too many LSU is romantic in Wyoming and I win wasn't even really known for its corporate laws but then you know Delaware took it and then it went all around the world and that's how you get more sprite like for builders we're trying to release the boundaries of observations which are quite hard I believe obviously I try to advise every time this quite wisely and also sometimes not practical by that cause there's a lot of lawyers that we don't like what about you to do it's like we can never tell you what to do and really go away so so I guess I'm as we work for like personal like he's like nothing like legal advice bugs out of your personal vices like what would be like there's like yes and yes it's an example of like use for example is just operating and discuss why it's okay like I mean like waiting for million the overkill in sometimes or you can select recommend to like blue jurisdiction to some smaller regions and replaceable or like do things anonymously is there anything for sometimes you might have I would suggest anything if you have the money you should get in-house fired as in Oz Meyer can tell you much more give you much more frightening advice because as an American law firm as a lawyer they basically hedge their risks so they don't give you they want either legal opinion which has hundreds of assumptions and it's based on this based on this then you can maybe do this but this is you know it depends so if you have the money you should always have an in-house lawyer who can assess the risks and also depends always you know it's a basic spectrum if you want to just keep out of jail you know like how much would be one attack and a lawyer will then advise you what the right approach is and if you cannot afford a lawyer or like not in the house I think as you spoke about jurisdictions have been forum shopping for your company is a very good idea and they are some group very crypto friendly regular jurisdictions where it's much better to have your company than others and also also jurisdictions that are not expensive but there are some limitations on and I mean maybe don't live in the USA there's something called Walmart jurisdiction in the US has a very very long research so it's not it's not enough but you're not giving us or somehow because if you are targeting us persons that you are quiet right and the only way to find out inclusively that you're not targeting us persons is to do TYC for everybody because you're blocking it's not sufficient easy so so unfortunately there's there's a there are all these issues around cache sorts of regulations I want to say something about that if you can't really tell you know who all became I see blocking the new Asus really unfortunate but it's a very the reason why us the most part is probably legal reasons and it deer barking is still like kind of it's not a food defense but it's tearing is a defense must times petition saying us persons are not allowed to participate it's not a long-term solution but that's what projects right now is out and it's one of the best risky approaches in this place okay you know like CODIS are but kind of effect that out I think one of you was saying that maybe the Dow could have specified that like code is in law or code is law or we're gonna go under the state of Delaware with jurisdiction does any of that even really matter because I'll honestly like him you had the sort of nebulous we of the Imperium community that ultimately decided what to do so they get any of these networks isn't like the real legal jurisdiction the decentralized network actually over I spent a lot of time talking to lawyers and something that they charge you a lot of money for and they say very often is it depends so I mean my personal view is that as it has a developer as someone helps teams work with teams to build technical solutions i I think that again I'm not a lawyer and um you know not all of a sudden pound you know only a minority of us about lawyers the lawyers want you know their business is to sell my business so people technical advice and so I I'm all under the same sort of I guess moral hazards that lawyers fall under because their job is to sell you legal advice and so I immediately like see it you know oh that guy is totally like track this conversation offer another 15 minutes for no reason and you can just keep it under dollars right and you know sue so do these protections help I mean they do help and is in a particular abstract frame right but in your particular instance particular case you have to have the sort of sophistication the savvy as a person participating in this business or whatever you want to call it community to to make that decision for yourself like ultimately your lawyers you know to be frank I'm almost certainly not going to go to jail and you know it's your it's your own you know you know do your own research you have to protect yourself I don't think that it's so I guess I was inadvertently completely skipped a part of your question no I do not think it is the blockchain community that ultimately makes the decision I think it's the people with guns will chase after you kick on your door that are old I don't know I would also say that I would love to see an initiative from this community because lawyers and that mr. Lee incentivize to get people active advice not to see some sort of initiative come out of the community to finance and find that ethical space apply positive people advice how people should have protections around that it's a long ask but I think that's but that's what I see about the kind of it doesn't that's very question for myself and I see that there is like a vacuum and that real need for this for it does the other issue there's the law which you're saying you can have all these legal kind of complete things in place but then a bunch of people decided to do something anyway now is that legitimate and perhaps some of the framing is a way of creating or disproving the legitimacy so someone could potentially sue so I mean I imagine part of but animated the decision to go and give him his money back as well this is the awkward Moe thing to do to get people's money that was based on the expectations that people wouldn't just willy willy nilly lose their money to do so a bug coat that wasn't their power to be entrusted that to the developers to do that's infallibly right thing to do in order to facilitate and keep experiment voting right business it's about that trust between us right commit to maybe others thought that that was an illegitimate nap like who are you to come in and do this first to the coast so it's so those are you those are the questions that lead to fundamentals if you just use a lot of different ways to to buttress your position right so someone could have seen that's not legitimate based on this set of rules that we had a long and enduring according a whole body of law because they were under this corporate we were making an analogy now to these cases and so what they're where they have legitimacy and the remedy is X if someone else can make a different argument so it's the law can be used as tools that allow people so there are tools to make to put hurdles and nice to see you guys again so what you do us to minimize the risk I think your questions always how do I minimize the risk I put hurdles in place I put a choice of law in my agreements I put terms of the conditions and it becomes then harder to see you and to get you places and the this is the final question of that yeah maybe to us organization just thinking about the district regulation I think I can walk it extends to people and the negative side effect that doesn't first cost of history Athens must have been the Great Depression had a lot of financial regulation commands to come prevent them and my question is what are the negative externalities that the blocking space gets rising and can actively regulate instances we have to wait for the mistakes to happen and they make retroactive regulation that's really interesting question unfortunately we're in the back of the room yeah I was really that's been interesting I'm going to let the lawyers respond basically wait for the massive mistake that happened the Great Depression or whatever you could argue that you already happened with the the ico boom one you know the companies that were not fast the inventor who invested all the money so I mean the protection of the consumers in that respect you could maybe not correct Ehrman economics the canonic times you could call that X makes technology which direct the negative seek to regulate and we only see it it's all about consumer protection and money laundering anti-money laundering concerns mainly and you know we managed to get rid of those externalities in the space privately myself is keen to regulate but unfortunately was deceived already they had that been you know follow and fall outs of that and that well is why we are now in this position having this pain yeah so I think the blogging community above all is far too large to sort of do as you're describing I think that there is absolutely no a subset of people who are interested in doing exactly what you're describing and there are people that promise panel people that talk to you that because of course people that feel this way they don't talk to but you know the idea I think the Dalit you know the the Dow bust cycle that we see on all crypto assets the natural volatility what I was sort of interpreting when you were first speaking was more of you know what happens when you have to go to the ethereum blockchain to like access some controversial video recording of Trump right I mean that to me is like a really like possible situation that we're in and then and then how would we as a community respond to that or you know you can be particularly troll if I can say every block I you know I put this data on all these blog chains here's how you access this horrible video or whatever and and you know and do it in this troilus way whether sort of large incentive for Trump to go observe and try to stop it right and you just sort of push the question to the floor I feel like that's the kind of event that were not as a community prepare for like it's that sort of situation I think you know fraud and sort of more conventional crime drug dealing even like gun running international crimes that stuff I think we can sort of handle as a community because you know you have the outlaws and the people who are trying to operate within the law but these sort of you know we live in this new political I mean I think for you know I grew up in the eighties maybe I was a kid or whatever but the political climate that we're in now it seems like there's this real political risk that we have with technology that even was the Clipper Chip and then these other things like the stakes weren't really the same it seems like the stakes have really changed and I don't think that there's much we can do about about those types of problems thirty Turks are preventative or puffle active regulation and said also called its own negative mister ality so you've seen with kyc of elements and and just with you know the whole likes you likes me what it's actually pushing at us who gets to access Capital Markets way so part of it at the labels are our place is to protect investors who are somehow less think this to here or less able to absorb losses because they just don't have as much money great but the metals having opportunities to access especially in an economic scenario today where wages are stagnant and most wealth creation is now through calculation so if you start preventing ordinary people from accessing account appreciating opportunities then they kind of stay poor sorry [Applause]