MIT Legal Forum on AI & Blockchain Busts Open New Thinking

By Joseph Raczynski

Massachusetts Institute of Technology’s Media Lab – Cambridge MA – October 2017 – In one of the more unique and unusual conferences I have participated, the inaugural MIT Legal Forum on AI & Blockchain was a meeting of 200 minds from across academia, law firm, and corporations big and small.  It included IBM Watson as well as CodeX, NASA scientists, Baker & Hostetler, a host of other Am Law firms, and startups galore.  Led by the gregarious MIT visiting scientist, Daniel “Dazza” Greenwood, who served as the master of ceremonies for the two day workshop.

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Dazza Greenwood – MIT Scientist – summarizing the day

What was so unusual was that after the keynote each day, the planning for the remainder of the breakouts happened in real-time.  Dazza asked the crowd who would like to run a session and to describe the topic.  Once that individual did so, Dazza then asked who would like to join that working session.  The sessions were added to the agenda immediately followed by the commencing of those sessions.  From the attendees the following topics bubbled up on day one:

  • Identity Management & Records Keeping – Chris Jagers and Joseph Raczynski
    • How do we begin the discussion of digital records on blockchain?
  • Automated LLC – James Miller and Harrison Perl
    • Project to checklist requirements to incorporate or register legal entities in all 50 states
  • VAT Coin – Joseph Kessler and Brian Ulicny
    • Governance is 75% of entities. Is that correct?  Does it fit this context?
  • Energy Utility Token – Jonathan, Michael, and Harrison
    • How can such a process be securitized and how do we get the revenue back in a way that is sustainable and trusted by investors?
  • Supply Chain – Jaipat and Gurvinder
    • Is there a need for a new area of law called, “Provenance Law”?
  • Bankruptcy – Bob Craig and Nina Kilbride
    • With cryptocurrency as collateral, how do you classify the property? How do you perfect ownership rights?

I had the opportunity to join several of these discussions over the two days.  Honestly there were one or two slight misses, where the tables were large and attendees from various backgrounds of familiarity on blockchain and AI led to a mixed conversation.  However, the hits – they were transformative.  How often do you have top legal minds from Am Law firms, NASA engineers, MIT data scientists and nonprofits mix together on a process surrounding “smart contracts” that leverage algorithms to develop an automated workflow?  The session called ditDIY Composable Smart Contracts, Modular Law – led by Vienna Loi, was a hit.  The NASA scientist and her team are actively building this concept out.  Think of it as code (smart contract) that when a certain event is triggered kicks off another event which continues to invoke other acts, all of which are recorded and maintained on a blockchain.  It is the future of this space.

The excitement was palpable.  You could see the evolution that is beginning to take place in Legal as we go from a general awareness of these technologies, to conceptual design of possible solutions.  MIT is fostering the creativity through this platform in their first attempt at bringing all parties to the table.

In the next post, I will dive deeper into Digital Identity using blockchains.

Exploring Blockchain Proof of Concepts in Deployments and use Cases in the Finance Industry

By Joseph Raczynski

October 2017 – Blockchain 360 IoT Conference – InterContinental New York Times Square – An esteemed panel took the stage to discuss the state of the union surrounding proof of concepts in the financial industry.  The focus of the six; to delve into what is working with blockchain, what is not, and what is ahead for the industry.

I had the good fortunate to moderate the group including Igor Telyatnikov, President & Chief Operating Officer at AlphaPoint; Ron Quaranta, Chairman, Wall Street Blockchain Alliance; Scott Matsumuto, CISO, Circle; Morgan Hill, Managing Partner, AxionV; and Yorke E. Rhodes III, Global Business Strategist, Microsoft.

The first topic lent itself to a deep dive in our current perspective within finance.  Quaranta, who comes from a background in the financial markets spoke about how blockchain has developed incredibly fast.  He has the perspective of an association where many groups of all sizes engage with the Wall Street Blockchain Alliance.  While the financial institutions have been involved with this for several years, there are other groups flocking into the space.  He said, “Now that you see the lawyers and accountants opening their eyes to it, you know it has legs”.  They need to be involved because those two groups will help “aid the industry” and create structure around the new technology as it is applied to the financial industry.  There was a bunch of head nodding on the panel in agreement.

Rhodes focused on what is preventing wider adoption of blockchain.  One of the primary areas he cites is a lack of trusted sources or oracles in the space.  These are known entities which can be a verifiable source of information.  Think of the Social Security Administration and their records of death certificates, or a known source which can verify the price of Facebook’s stock on a particular date.  While this data might be available currently it is not as well developed and built out to interact with the blockchain just yet.

Hill jumped into the fray by discussing integration and interoperability.  Right now most blockchain’s cannot interact with other blockchain’s.  They are siloed.  Rhodes said that Microsoft is looking at how to resolve this issue.

The panel discussed how ICOs (Initial Coin Offerings) impact POCs.  Telyatnikov described this phase as a mania that is currently a bit frothy, but noted this is a “new asset class” that will be here for the foreseeable future.  The ICOs are almost POCs, but in the nascent stages, as “often these companies have concepts, which are not built out yet”.  It is hard to have a POC when a company only has an idea spelled out via a whitepaper – with no working model.

The panel answered questions from the audience, including one around regulation.  What is ahead for the law makers when it comes to blockchain and the financial industry?  The panel chucked.  Quaranta and Yorke summed it up for everyone by stating these are the early days of blockchain.  “Legislators and other agencies are in the information gathering stage.  We are beginning to get a sense from them about guidance, but much more is on the horizon.