This Week in Law 278 (Transcript)

Denise Howell: Next up on This Week in Law, we’ve got Aaron Wright, Warren Allen, and Peter Van Valkenburgh. And if you want to know how the Bitcoin block chain can site people, save journalism, enable smart contracts, and yet is under attack, this is not a show to miss. Join us.

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This is TWiL, This Week in Law with Denise Howell, episode 278, recorded October 10, 2014.

Schroedinger’s Crypto

This episode of This Week in Law is brought to you by Nature Box. Nature Box ships great-tasting wholesome snacks right to your door. Forget the vending machine and start snacking smarter with wholesome, delicious treats like baked cheddar potato sticks. To get your free Nature Box sampler box, go to naturebox.com/twit. That’s naturebox.com/twit. Hi folks, Denise Howell here. So glad that you’re joining us for this episode of This Week in Law. Because it’s on a topic that I personally don’t know enough about. So I’m thrilled to have the opportunity to learn from the really brilliant folks here joining us today. I’m guessing that maybe you guys out there, I don’t know, probably lots of you know more than I do about the specifics and technology; possibly not quite as much about all of the policy ramifications. All of the potential uses of the technology behind Bitcoin. So we’re going to go deep on that today and we’ve got a great panel of folks to do it. All of this, blame Aaron Wright for this show. See he emailed me and brought a ton of issues that I never ever thought of before. And did not know were happening. Thought that it would be great synergy for our show. And he was absolutely right about that. Aaron, it’s great to have you joining us today. And thank you for lighting the fire under me to put together this show today.

Aaron Wright: Thanks for having me. I’ve always been a big fan and am happy to be on.

Denise: We’re thrilled to have you. For those of you who are not familiar with Aaron, he is the director of Cardoza Laws, tech startup clinic. He was also the cofounder of Armed Chair GM which got bought by Wikia at which point he became general counsel and a VP at Wikia. So Aaron, thrilled to have you. And once again, thanks so much for getting us to go deep on Bitcoin.

Aaron: Yea, it’s going to be great.

Denise: So as soon as Aaron emailed me and we realized we would be going deep on Bitcoin and looking at some current controversial issues about the regulation of Bitcoin, I knew that we had to have Jerry Brito or someone blessed by Jerry Brito. Excuse me, I always do that to his name at least once when I say. And he put us in touch with Peter Van Valkenburgh who is the director of research for Coin Center. Hello, Peter.

Peter Van Valkenburgh: Hello, Denise. And hi everyone and thank you for confirming my blessed status from the great Brito.

Denise: Yes, you have been blessed by the great Brito.

Peter: Gary’s our executive director here at Coin Center. We’re a really fresh organization that’s non-profit, looking out for preserving freedom of action for innovators in the digital currency space. So happy to be here.

Denise: Wonderful to have you. And in a stroke of great synergy, Peter is fresh off a gig speaking at the DC Legal Hackers meet-up and we’re going to talk a bit about what Peter discussed there. But guess what, joining us is the director, the lead director of the New York Legal Hackers organization. And that’s Warren Allen. Welcome back, Warren.

Warren Allen: Hi, Denise. Thanks for having me. I should correct; I’m not really the lead director. We have four directors, Phil Weiss, Tara McDot, and Lauren Mack. And I’m just one of the four. But we all sort of share decision-making, powers on that and responsibilities. But it’s a lot of fun. And we also have a number of chapters outside New York and DC is one that we’re very proud of. They do amazing work with McWilliams, Jameson Dempsey, and Allen Delevey. Got to spread the love around for the legal hackers.

Denise: And you’ve been on our show, I don’t know this is your third or fourth time now. Tell us for someone who may have missed those previous wonderful sojourns of yours on This Week in Law, what is Legal Hackers all about again?

Warren: So Legal Hackers is really sort of a movement looking at bringing lawyers and coders and technology people together in the same room, having great conversations like the same kind of thing that you do on This Week in Law. Talking about how law doesn’t keep up with technology and vice versa. And thinking about practical solutions about what we can do to change that. So hopefully I think we’ll have some good legal hacking basically happening right on the show.

Denise: Let’s do it. And we’re going to talk a lot about the ramifications and the regulatory framework and immediate future of Bitcoin. So let’s go there right now. Alright, Aaron when you emailed me you let me know that there in New York where two of you are, is that right? No, at least Warren is there.

Aaron: I’m in New York, too.

Denise: Oh, you’re in New York, too? There we go. So there is legislation already pending or at least regulatory rumblings afoot from the Department of Financial Services in the state. About wanting to license people who are involved in the Bitcoin infrastructure. Can you tell us, tee that up for us. What’s going on there?

Aaron: Sure. The Department of Financial Services which is a department in New York State has proposed a bit license regulation. It’s still a proposal. It’s a very long regulation. But basically if you are transmitting virtual currency and it’s not really for a gaming purpose, then you are potentially subject to this licensing scheme. And this licensing scheme has some really interesting and potentially difficult implications for startups and other companies that are going to be working in this space. You would have to get finger-printed. There’s bonding requirements. There’s a lot of, pages and pages of requirements of things that you would need to comply with in order to satisfy this regulatory scheme. The idea I think, what really pushed this forward, is the Department of Financial Services is worried about potentially problematic aspects of virtual currencies in terms of consumer protection. In terms of just making sure the government has a sufficient handle on tracking where money is going. There’s this rule called the Bank Secrecy Act and there’s a bunch of rules, anti-money-laundering rules. And New York State has basically tried to take a slant on those rules and package them up in a proposal that they’re calling the bit license.

Denise: Right, so you can understand why regulators have their eye on Bitcoin. Certainly New York is not alone. Peter, in his recent talk at the DC Legal Hackers group, did a slide presentation and one of his slides nicely and graphically presents some of the most likely candidates who might be interested in regulating Bitcoin. There we go. A whole serious collection of folks and even if just a few of those got involved it would seriously impact the Bitcoin landscape as we know it now. Why is this such a bad thing, Aaron, that regulators are interested in Bitcoin for a reason? It’s an unregulated currency exchange so can you at least sort of see the regulatory concern here?

Aaron: Yes. So there’s definitely valid regulatory concern. You’re dealing with value, people’s money. It makes sense for regulators to want to step in and provide basic protections to make sure that money is adequately protected. That your value is not going to get stolen in some way. The problem or one of the potential problems that this regulation has currently drafted, and I think it’s an open question as to whether or not it’s going to maintain its current form, is that there’s a lot of amazing applications for the technology underlying Bitcoin. The real part of what makes Bitcoin a revolutionary technology is the thing called a block chain. The block chain is really a shared database that allows people to transact and share value and soon property and other things without the need for a centralized middleman. So the first application that really uses this technology is Bitcoin. And that enables people to trade money. And to exchange that, but the applications for this vast and they’re going to expand well beyond just currency. Into digital contracts which some people are now calling smart contracts, to digital property, to just really eliminating the need for a middleman in a lot of everyday websites that we use. Using a shared database, you can do things like exchange emails without the need to send it through Gmail. Or transact a type of transaction that you do on eBay without the need for eBay to sit in the middle. So there’s a lot of wonderful applications for this that are not in the financial realm that get potentially swept up by the bit license proposal.

Peter: So, Denise that slide with all the regulators on it, I think what we’re dealing with as far as so many different sources of regulatory oversight, is we’ve got federalisms. There’s a lot of the law that you actually need to worry about when it comes to money transmission. A lot of that is state-by-state law. So instantly we’ve got 50 potential regulators there. And that’s not a threat from evil conspiracy against new technology. That’s just the way our current systems are set up. And sometimes our current systems don’t work with new technologies right off the bat. And there’s going to be a period of adjustment there as we figure out how we deal with an open protocol that’s decentralized and crosses borders. But is currently potentially regulated by individual states. Let alone by individual countries across the globe. In the internet space, for defamation law which was of course because it’s common-law, was by a state court kind of thing. And that was hugely problematic for say a big internet company like Google. Or a small blogger who’s in Alabama and they suddenly drag into a court for defamation suit in Oregon. And what was a really fortuitist turn of events in the history of internet policy was that an interesting-sounding law: the communications decency act. Which really sounds like it’s about censorship maybe. And originally it had some stronger oversight in it. But ultimately, that law was a preemption in a way of defamation law state-by-state. So you ended up having to only deal with a federal law to worry about as far as what you’re speaking instead of state-by-state. And this is all going to be very familiar to a bunch of tech-quoters. But I think we’re going to see similar things happening. I’m not saying we’re going to see a bill that preempts state laws anytime soon from Congress, nor necessarily would we want to. We don’t want to rush these processes and be premature and get something we realized we actually didn’t want. But that’s the first thing with this plurality of regulators. And the second thing is, as Aaron was saying very well, Bitcoin is an interesting thing. It’s not just money. And I just said Bitcoin. I shouldn’t say that; I should say crypto-currency. Because we’ve got others; we’ve got the Alt Coins, we’ve got new protocols like Aetherium. These are all tools that are basically the block chain in common. And as Aaron was saying, the block chain has all these different uses. You can use it to transmit value on a decentralized open protocol. You can use it to register property. You can use it to unlock your car. You can use it, you know these are all proposed future uses. So we say okay, to a regulator it’s not just currency necessarily. It could be a digital commodity or a digital asset. It could be bundled and securitized or it could be used as a protocol to effectuate different things that you do over a network. And at that point, regulators who are very smart people who have had illustrious careers; this is all new to them. And you’re telling them, well it’s like trying to explain the internet in 1995. And at the same time trying to predict Facebook in 1995. It’s not going to be IRC, it’s going to be all these other things.

Denise: And for anyone who finds themselves in the position of having heard of Bitcoin and you might be somewhat familiar with what a block chain is, or maybe not. One of the discussion points for our show today is a piece written in January of this year by Mark Andresen called Why Bitcoin Matters. And I highly recommend it. It’s great background and great analysis of why this is a technology that has broad application. I’ll read you part of it that sort of sets it up. He’s talking about the block chain and he describes why it’s important. Bitcoin is the first practical solution to a long-standing problem in computer science called the byzantine general’s problem. To quote from the original paper defining the BGP, imagine a group of generals of the byzantine army camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However one or more of them may be traitors who may try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement. And then he goes on to say the practical consequence of solving this problem is that Bitcoin gives us for the first time a way for one internet user to transfer a unique piece of digital property to another internet user such that the transfer is guaranteed to be safe and secure. Everyone knows that the transfer has taken place. And nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate. So let’s talk about, people are familiar with Bitcoin, they’re familiar with some of the problems that the company Bitcoin’s rapid growth. And expansion, but they may not be as familiar with some of these alternate technologies that we are eluding to; things right in the crux of the startup sphere that Aaron deals with. Tell us some of the interesting things that can be done with a block chain, Aaron that people might not be thinking about right now.

Aaron: Sure, and one other point on the Mark Andresen’s thesis. This is a technology that has been 20 years in the making. This is an issue and a problem that people have been thinking about for 20 years. And the fact that there’s a solution now, it’s a really big deal. The applications for the block chain are pretty vast. One area that basically the internet was forged in the early 1990’s and everybody really wanted to build a digital currency at that time. There’s a bunch of articles written at that point talking about the need to build a digital currency for the internet. If you go on Google and search for Milton Freedman, you can actually hear him speaking about this in the late 1990’s… about how a digital currency is going to be brought to life. And now it’s finally here. And one really amazing application for digital currency is that you can actually get smaller than a penny. And that’s a big deal because a lot of things on the internet have a lot of value. But that value might be lower than a penny. And what people are working to build is systems where micro-payments are used to one, dampen some of the noise that’s on the internet. So if every email had a small stamp associated to it which was a fraction of a penny, the business model for spammers would go away. We could actually have a spam-free internet. That would be an enormous benefit to everybody who uses the internet. Another thing that a lot of people online realize and they don’t really have a great solution for is content. Content is either locked down or it’s freely available. And I don’t think anybody is happy with either of those solutions. There’s good arguments on both sides. One thing that could be developed with this technology and I’ve seen people working towards developing with it, is actually tying micro-payments to content. And that means every time you click on a piece of content, a small micro-payment would get allocated to the creator of that content. And they would automatically get paid. That could really transform the way we view content online. It would actually incentivize and align everybody’s incentive, to be actually encouraged at that point to spread it as far and wide as possible, if you knew you would get a small micro-payment every time someone clicked it. So one area that’s really exciting is micro-payments.

Peter: If I was going to interject real quickly and then we’ll go back to you. For the people who are copy-left out there and I’ve always been interested in the debate. I don’t take a strong point of view, but block chains and these sorts of technologies could also be used for a system where you don’t necessarily demand that people pay to view content. But you do demand some kind of decentralized ledger that proves that content has been borrowed and used by someone else. So you could take Creative Commons and the fantastic… I mean Creative Commons already hacked the law years ago and it’s pretty awesome. If you could take their business model and use the bock chain as a database of reputation and attribution. And that would already, that’s already an incentive for production. But sometimes you say oh I want to attribute to somebody but this picture came up on Imgur or on Reddit and I have no idea where it originated. If we could find a way to do that, that’s fantastic as well. Back to you, Aaron.

Aaron: I think once you start thinking of an internet that has micro-payments attached to it, you can also do some really interesting things. For example, you could have remix fees associated with them. One issue with the internet is how do you compensate people for using their content. And they want to do something else with it. If you knew you could get a piece of that in the form of a remix fee of some sort that would be a pretty interesting thing to do. And in a world where there’s micro-payments, that’s something that becomes available. And I think we’re going to start seeing these types of systems develop pretty rapidly over the next five years. Maybe that’s too short of a time line and maybe it’s 7-10 years. I think this is something people are working towards and there’s a lot of value that people perceive in it. You’re going to see a lot of innovation with it. The second area along with micro-payments is the ability to digitize a contract. If you think about what a contract is on a basic level, it’s really just the execution of a condition. Many parts of a contract, not all of them. If an event occurs, you know a second event happen and a contract is a series of those conditions. And using new technology, there’s a couple of projects that have basically built the ability to build immutable, digital contracts. And that’s also going to be a very important development in the terms of the internet. We just talked about micro-payments. Well you know it’s highly likely that associated with micro-payments will be micro-contracts. So a lot of micro-contracts that people enter into over a long period, as they surf around the internet, they just allocate resources. Along with some of the traditional law that we practice as lawyers could… pieces of that, not all of it, but pieces of that could get automated through these contracts. So that’s another exciting part of that. And kind of an extension of micro-contracts is a whole slew of other things that we know about today. And we use in finance and other areas. There’s smart equity which would be the idea of using either smart contracts and other block chain technology to help people raise money online. In any way that they could conceivably imagine. And there’s also the idea that smart finance, which would be the idea of basically using smart-contracts and/or micro-contracts to enable people to build and create financial products that are traded on major markets. This is really exciting technology. But going back to all the parties that could potentially regulate this space, it really sorts to bump into a lot of areas where there’s heavy regulatory schemes. So there’s going to be a lot of tension here. I think at a fundamental level, the internet and the advances in computer, putting a copying machine in everybody’s pocket, a computer in everybody’s pocket; a block chain is going to really enable people to have a commercial bank in their pocket, an investment bank, and a law firm in their pocket. A world that has that much power on an individual level requires a lot of thought and consideration to think about how we should dealing with this technology.

Peter: As Aaron hinted on that slide of the many different regulators, one of them is the CFTDC, the Commodities Future Trading Commission; they just had an event yesterday. Their global market’s advisory committee heard testimony from a number of people in the space who are trying to either do something with a commodity, trading instrument with Bitcoin or maybe even do commodity trading instruments through Bitcoin. And our executive director, Jerry testified along with some people who are from the startup space there. And also we have a link to who man should Dobbs’ piece on smart-contracts. He is a law professor at New York Law School. What I think is really interesting about this testimony about watching how regulators are coming to view these issues. Or just coming to be aware they exist is that there are two things to think about if you’re the CFTC. And they’re just beginning to think about these things. And it will be interesting to see what changes. The first thing is can we have dollar denominated currency swaps that would actually enable people to watch the price of Bitcoin and put in an order to buy or sell at different prices so that they can automatically hedge the risk of price fallout and so on. So if you’re an innovator, if you have a startup that’s going to use Bitcoin in some way, one of the things you would worry about of course is that you’re going to be holding some Bitcoin as an organization. And by holding that Bitcoin with the price volatility being high, because you can get pretty big swings in the price of Bitcoin in a given day; I think the average on a given day is something like 3.5% but sometimes we see 20 of course. It always hits the headlines. It’s a new asset. It’s exotic, people are still figuring out how they feel about it. They have a new entrance. But if you’re holding that as part of your business, that is a liability. So if there’s a way to hedge that holding through a traditionally dollar denominated security, basically a commodity security, then that really enables you to offload some of your risk onto a financial market that’s willing to hold it. So that’s huge. And that’s coming soon. Already from a group called Tera Exchange which is building this commodity instrument on Bitcoin. But that’s just a traditional commodity’s instrument that is the commodity in question, is Bitcoin. The other question is can we do commodities trading through the Bitcoin protocol. Or through some other cryptographic protocol. Because as Aaron was saying, we can program X into these very complicated transactions that have conditions. They’re just if/then structures, just like normal contracts. If the price hits this, sell this many. That can all be done through automation. And that’s going to be a big change. Of course we’re still going to need lots of humans involved in the process to set these things up and make sure they run well. But you get a lot of security from offloading the actual initiation and then completion of these things to a network that will automate it. And it will be interesting to see how the CFTC eventually comes around to feeling about that. How they’ll regulate those transactions when they’re not happening in traditional exchanges when they’re actually happening on a block chain. I think they’re just getting started with that and it’s very exciting to see testimony like this because you get to see people’s eyes light up like oh gosh, there’s new stuff out there. And you hope you don’t see anyone’s eyes light up and say oh gosh, I’m going to be replaced by a machine. Because that’s also not entirely true. We create jobs when we destroy them in this hence, because someone has to use the machines. And people are messy, you can’t really tailor all the needs of a person with a robot. You need a person to deal with the person, and then the better tool to do that interaction is the robot. It’s all very interesting. I hope I didn’t freak anyone out or get weird.

Denise: No, but you could very well freak out lawmakers with the conversation that we’re having here today. Off the top of my head, I have so many questions by the way that have all flowed from the last 10 minutes of conversation. I hope to get to at least some of them. The first one relates to the most recent topic; and that is both the fluctuation of the value of Bitcoin and the notion that you could offload some of the risk and have a commodities market. Securities infrastructure is one of the most at least in the U.S. highly and tightly regulated commercial enterprises that we have in existence. And so when you float these ideas by lawmakers that we’re going to have this very automated kind of financial infrastructure where the price fluctuates wildly. And you could potentially displace things like the existing commodities infrastructure with it. I could see a lot of freak-out happening. I could see the people wanting to… we have regulations in place to control price fluctuation. We have certain regulations in place to control misuse of automation in the securities realm. Of course it happens anyway. So that’s a whole other can or worms. There is a reason why it would be much harder to see the kinds of misuse with technology in financial transactions that we sometimes see in the stock market where people are beating each other by a fraction of a second to squeeze out an additional gain from a transaction. That would probably strike me intuitively, be difficult to do when you’re using a distributed block chain. Because there’s really no way to game that, right?

Aaron: In terms of gaming the system, I think the advantage for people who are in finances, if you have the self-executing contracts they could be potentially quicker. Things that are quicker in finance enable more efficient and liquid markets. That’s the advantage of it. I think in terms of regulators looking at this, if something looks like a traditional financial instrument, it clearly makes sense that a U.S. regulator would look at it. But I think you bump into the same issues as you do on the internet. You can’t stop somebody from going to another jurisdiction where they might permit this and open up an exchange of some sort. And once the cat’s out of the bag, it’s really hard to stuff it back in. And shut the door. It’s the internet, and I think the same issues that media companies and content companies have faced in terms of dealing with the spread of content online. I think you’re going to see similar things with regard to finance online. I think even more interesting and presenting new opportunities and challenges is that it’s going to be a lot easier for people to issue things that look a lot like securities or commodities. There’s been a number of projects where artists and other people are issuing their own alternative coins that are built on similar technology as Bitcoin. And they’re using it to fund themselves and just the idea is get in before I’m huge. And buy a bunch of my self-issued currency, my Beyoncé coins. And as I get bigger and bigger and as I get huger and huger, the value of that commodity would go up. I don’t know the minds of the regulators but I don’t know of how they would react if there’s millions of people who are issuing their own coins. What’s the right way to respond to that? I think that’s a really difficult question. I think in watching the internet evolve, we’ve seen that when these types of technologies hit the mass, like with music and MP3s and other things like that, that they really raise difficult questions for lawmakers. Where there’s not really clear answers on the right way to proceed.

Peter: I’m somewhat optimistic in the long run that regulators will not only become comfortable with block chains. But they’ll actually see them as an amazing tool for their own law enforcement purposes. And I don’t mean spying on people. I know that’s immediately what a lot of people are going to think. Peter at Coin Center is saying… I’m not even going to finish that quote because I’m going to be quoted on it. What I mean is if someone was to set up a new stock exchange using internet technology pre-block chain, you would say, “Who the heck are you?” It’s like somebody said of eBay. At first people were saying really you’re going to give your credit card number to this stranger over the internet and they’re going to give you goods? But that system evolved and it evolved to use reputation as a mechanism for doing some degree of consumer protection. You shouldn’t be buying from someone who’s someone else previously said had brought. But you’d still have to trust eBay actually. That the reviews being posted were valid and this is the same question that comes up with say services like Yelp these days. Are they gaining reputational assistance? The trust you have to have in the person who’s starting the business is a little high in the early days of the internet. What block chains afford you is it’s this decentralized network. So it’s very much like the internet itself. It’s running through TCP/IP but it’s actually a protocol of its own for provably sending things from one place to another. And saying it’s been destroyed on this side and it now exists on this side. And the process of how that happens provably saying it’s gone here, there’s no fraud. It’s gone, I didn’t make a copy. I didn’t forge a new dollar. And saying that it’s now over here, that process is also transparent. Bitcoin is open-source software effectively. You can actually go I think to Get Hub. I should know that for sure. But I think to Get Hub and you can see the actual source code of Bitcoin. So there’s still a level of trust for someone who’s not like a really high power coder. I would not be able to say, yea that looks mathematically secure. But a regulator could easily hire someone who’s brilliant and who would actually look at everything that happens. All the math that happens to move the asset from here to here. Or to bundle the security and say it would be very difficult to game this. As an expert, me being a fake expert, as an expert, I don’t think I could game this. And not only that, there’s, say Bitcoin right now there’s about $5B of value in there. That’s a pretty cushy incentive to go break the thing if you’re someone with bad ends. If you’re a nasty person. And thus far we don’t, we see people infiltrate the exchanges. Some of the centralized ways to access the protocol. But we haven’t seen somebody actually in-mass, steal things from the protocol or game the protocol itself.

Aaron: And that’s because the protocol is wrapped in cryptography. And this cryptography is mathematically sound. I’ve spoken to a lot of people who are building this technology. They say that it’s all wrapped and encrypted. And until quantum computing gets invented, it’s going to be difficult to peer in and understand to decipher all the cryptography that’s being applied into this system. I think beyond the source code being open-source, it’s a shared database. So you also have a record of every single transaction. So you can go and download any of these block chains that are on there. If it’s Bitcoin or Alt Coins and you can get a full history of every single event that happened in the network using that block chain. So from the very first moment, the genesis block to the latest time that the entire network synchronized. And that’s a really powerful thing. That means you can run metrics on the entire database. You can know that a person with a certain wallet transferred funds from one wallet to another wallet.  And there is a high degree of transparency to these systems in terms of events occurring without actually the substance of the underlying event. It’s kind of like you know you’ve got a safety deposit box. But you don’t know exactly what’s inside the safety deposit box. If someone moved the safety deposit box and it left the bank, and put it into another bank, you would know that that event occurred. And that’s very powerful.

Denise: Okay, I want to move away from the 10,000-foot level in a moment here and more into specifics. Some of which we’ve touched on. Before that I want to do two things. First I want to put our first MCLE passphrase into the show. And that’s going to be law firm in your pocket. Going back to something Aaron said a moment ago. So we put these passphrases in the show in case you are listening to the show for continuing legal or other professional education credit. We have more information about MCLE in the 50 United States at our Wiki at wiki.twit.tv. If you find This Week in Law page there, it will give you some information about your jurisdiction if you’re interested at looking at that. And we put these phrases in because some of the jurisdictions like you to be able to demonstrate that you watched or listened. That’s why we do it. Secondly, we haven’t been hearing much from Warren Allen on the show yet. And I suspect that’s because Warren you’re sitting there taking furious notes because as someone who’s in charge of a legal hacking movement where the idea is to put smart lawyers in technologists in a room and try to figure out practical solutions to problems. And especially being in New York with the Department of Financial Services there, looking into licensing people working with Bitcoin; why don’t you tell us, Warren, what your approach would be toward tackling the complexity of regulating this burgeoning ecosystem. And whether you guys have done any work on that already.

Warren: Well we definitely have up here in New York. But obviously D.C. has gotten some great presentations happening on this already. And it’s something we’ve got to check out and put on the list of many things that we want to do. But just from thinking about the regulation of Bitcoin at this point, it’s really I think some of the analogies so far have been comparing back to the early days of the internet. And someone mentioned CDA230 and provisions like that where you have the federal government stepping in and saying hands off for now in terms of talking to the state regulators and state causes of action. Taking this particular technology saying let’s see where this goes and see how we should really wind up treating this. I think that’s something that’s really going to be important for stimulating growth and encouraging development to the new kinds of technologies that we’re talking about here. Obviously it’s a pretty exciting area. If you have 50 state regulators plus the federal government, and then we’re not even talking about all the different potential connections that you can have internationally. The European states, anyone else with a potential interest. If they all impose their own regimes, it becomes pretty impossible to comply and possible from the regulators’ side to enforce. I think establishing some sort of basic protections and preemptive ground rules, I guess, could really be a huge step in allowing cool things to continue to happen. So that’s one point that I would definitely make on that side. Another point I think is that it’s really interesting to think about potential security instruments in the Bitcoin space. Because you’re really talking about something that a lot of the potential investing public doesn’t really I think fully understand at this point. I mean if I try to talk about Bitcoin and I certainly don’t have nearly the level of understanding of it that… I think the other guests here do. So if I try to talk about this with some of my friends, they may not really have a full grasp on it either. And talking about it as a potential investment vehicle; where the importance of our regulation regime right now is conveying information so that the consumer of the investment can make a smart informed decision. That’s a pretty steep hurdle at this point to climb. So that’s just something I’m making as an observation based on the conversation we’re having here. But it’s super-interesting, definitely at this point. And I think that it’s going to be exciting no matter what. I’m curious to hear what thoughts you may have on that point.

Denise: Anybody want to bite on that?

Aaron: I think the big thing is it’s really to start thinking that this technology is broader than finance. It’s really the block chain. It’s a shared database. Just like if you thought of the internet as email back in 1998 that would have been problematic. Because there’s a lot more that’s going on and that we’ve all seen happen over the past 15, almost 15 years. Once we saw the internet browser and the development of the hypertext protocol and all these other amazing things that we’re interacting with on a daily basis; if we stopped in 98 and just said we’re going to only allow email. And only allow this technology called the internet to really deal with email, we would’ve lost a tremendous amount of value. That would have been really bad for this country. That would have been bad for the world. And we’re facing a situation again where we have a justice, a highly disruptive-although that term is clichéd-technology, we’re facing situations where regulators are rightfully popping up their heads and saying we need to look at this more deeply. But caution might be a good idea here. To see how this is developing. Every month a brand new technology is being used or developed using this technology. And my concern is that if we act too quickly and we act too rationally, that will really destroy a lot of value. And a lot of great things that we can do to really help the entire world.

Denise: That just could not be a… go ahead, Peter. Finish your thought, then I’m going to take us into some of those specifics.

Warren: Sure, sorry it’s Warren. I just want to add one final point. I just want to follow-up on that thinking because when email was developed, you wound up with spam. And shortly after you got spam, you got anti-spam laws. So it’s interesting because we do have specific regulations and laws that affect elements of certain facets of the internet. So I think that’s an interesting comparison. You could have very carefully-framed laws regarding certain uses of Bitcoin again. But I think you’re probably right, that at this point it’s too young of a technology to figure out what all those potential uses could be and how you really want to frame the regulation of them.

Peter: As Aaron said, it’s very interesting that actually sometimes it’s not just how do we deal with this as a regulatory problem. It’s how do we use this to deal with existing regulatory problems. So Aaron was explaining that you could put a little stamp on emails and that would make a really good way to dis-incentivizing people from spamming because they can’t send thousands of emails because it would become costly at that point. Or as digital copyrighters are saying. I think a big one too is consumer protection. We’ll be filing another comment to the New York Department of Financial Services about the bit license. And one of the things we want to stress is right now in this country according to the Bureau of Justice Statistics, we in 2012 alone had $30B worth of costs of identity fraud and theft. That’s a massive problem that needs to be solved. And there are some interesting new technologies that are slowly emerging from Bitcoin which right now we see as a very shifty confusing possibly scary asset. But there’s a technology called multi-signature transactions wherein you put three keys on a wallet. And you have your Bitcoins there and then you go to pay for something and two of those keys have to be turned in order to send the funds to the person at the store. And let’s say we have the three keys, the customer has two, but only one of them is on their phone. And then an intermediary which is doing fraud protection is doing the third. So when the customer goes to pay for the thing at the store, the customer’s phone initiates the transaction. The fraud protection service watches and says oh yea, he’s buying something at the normal bodega at his apartment. Of course, confirm. The transaction goes through. But on the other hand if someone steals the person’s phone and it’s in evil hands. And this person tries to transfer all of the Bitcoins or crypto-currency out of the person’s wallet, the fraud protection service will look at that and say well I don’t know who you’re sending this too. And you’re sending all of your money away. I think this is not you. I think this is your phone being stolen. I’m not going to sign off on the transaction. And the thief just has one key. They have the phone because the actual user, they kept their other key safe in a safety deposit box in a bank. Or maybe in their sock drawer or something. And so you get this really neat mathematically-based fraud protection that is much superior than our currently, massively problematic as exemplified by Target and Home Depot and the J.P. Morgan breach. Massively-fraud payment system right now when it comes to the risk of identity theft. And so that should be an opportunity. That should be something a regulator sees and goes oh, cool. We can use these tools and we can ask people. We can ask companies to use these tools because these tools make our job of safeguarding our constituents that much easier.

Aaron: Exactly.

Denise: Absolutely. And we hope that some of them will begin paying attention and looking at Bitcoin as not something to be controlled. But to be monitored and developed and used productively. Let’s take a break. If you’re like me, we’ve been going along. We’ve been terribly interested in this discussion. This happens to me all the time. Where I’m too busy living my life to eat. I want you to take a break now and think about whether you have given yourself sufficient nutrition. And in order to help you do that in a healthy way, I’d like to let you know that our show today is brought to you by Nature Box. Right now Nature Box is giving you a chance to get a free trial box of their most popular snacks. And I’m very serious. This happens to me all the time. I get up in the morning and have some coffee and maybe a light snack. And I go through my day and before I know it, it’s four or 4:30 in the afternoon and I haven’t eaten a thing. And at that point, I am absolutely starving and wherever I am, whatever is food, I’m going to reach for it and just gobble it down because I need something to keep going. So that is why it’s so great to keep Nature Box on hand. It gets you away from the vending machine. That’s why vending machines exist, right? Because you’re at work or school and some other environment where you’re just too busy to think about eating and you have to grab something quick. Well of course the stuff that is there for you to grab is not very good for you. So if you keep Nature Box on hand, that helps go a long way towards solving that problem. I will give you the caveat. If you’re not alone in your home, that keeping your Nature Box to yourself… maybe we could put it all on the block chain. Then you could monitor who devoured all the sea salt pop-pops. These are going fast in my house right now.

Aaron: That’s not that far-fetched.

Denise: There we go. The big island pineapple, also has been very popular.

Peter: And your fridge could be programmed to order even more.

Denise: That’s right. I would need to. Although Nature Box makes that…

Peter: Only from Nature Box.

Aaron: Yea, exactly. Nature Box.

Denise: They make that super-simple right now because you just set up your recurring order and your fridge doesn’t have to get involved. But really it’s very hard for me. I almost feel like when I used to have this problem the most was when I was working at an office. And you’re sharing the fridge there with your coworkers. And of course notoriously people put little post-its and things on their stuff in the fridge. And I’m very tempted to label our Nature Box supplies so that they don’t get all gobbled down before we can all enjoy them. So far, I haven’t had to resort to that. The most current box I got also had, I’ve been showing you the whole wheat blueberry Figgie bars, the big island pineapple, and the sea salt pop-pops. And these are mini majules dates. In northern California people are all about the wine and the knowing all the varieties. And you know where it’s grown and what that means. Here in southern California, we’re a little bit like that with dates. Because they grow out in the desert here and they’re all different varieties that we get in our grocery stores. And I have to say these little majules we got from Nature Box are deliciously and make a very fine date shake. If you’ve ever had a date shake, look it up and make yourself one. And Nature Box has hundreds of delicious snacks. The great thing is that you don’t feel guilty about eating them. When I grab four of them and I’ve forgotten to eat, I’m putting something good into my body. It’s better for me than anything else I might grab for because get this; they’ve got zero artificial colors, flavors, or sweeteners. Zero grams of Trans fats and no high-fructose corn syrup. You’ll even find snacks without added sugar and gluten if those things are important to you too. So in the afternoon when you’re hungry, do what I do. Grab apple cinnamon crave from Nature Box. Or sriracha-roasted cashews. Or cranberry macaroon granola. It’s all so good and the variety is incredible. You’re going to find out way more when you go to the site and you start picking out what you like. It’s so much better for you than other snack options out there. You should go ahead and start your free trial, get a free sampler box at naturebox.com/twit. Stay full, stay strong. And start snacking smarter, go to naturebox.com/twit. Thank you so much, Nature Box for your support of This Week in Law. Alright, we have some very specific applications of block chain technology. We’ve touched on some of them and we’ll get into some that we haven’t mentioned. Let’s start with spam. We’ve been talking about spam and it was one of the primary reasons the internet started to be regulated in the first place. Now we have a new technology that could perhaps do away with the need for regulation of spam. Because it would make it technologically unadventageous. Could you go a little deeper on that, Aaron? And tell us exactly… it seems to me what you’re saying is that in order to send an email, there would be some-even if it’s a tiny-financial consequence to doing so. Is that what you’re envisioning?

Aaron: Yea, so think about a spammer’s business model. It’s let’s send millions of pieces of email. Or a million posts to various blogs or other things like that and hope we get a small fraction of them to click a link. And a small fraction of them to buy a product or enter into some scam that we’re running. And then we make our money and we’re happy and everybody else on the internet is crying. So the idea is if you actually just put a very small payment, you know .0005 cents or something like that; that would be enough to just obliterate that business model. And it wouldn’t be feasible for them or anybody to do that. The big technological limitation is, that’s great, but how do we ensure we have micro-payments hardwired into the internet. And that’s what people are working on. There’s a project called Aetherium. And they’re working hard to basically build a general-purpose computational machine that has a browser. That basically has the block chain built into it. Just like how HTTP is built into the browser now. They would have their block chain built into the browser of the future. And it would enable these types of transactions.

Denise: It seems to me a little bit scary for people who see the internet as a great egalitarian tool that anyone, even people with very marginal resources can find a way to access and use at their public library or their school. And then if we’re talking about taking something that is freely accessible now or various aspects of it, and putting even micro-payments on them, that that could be problematic in an access to the resource kind of way. Don’t you think?

Aaron: Sure, I think that’s right. I think what they’re envisioning would be backwards-compatible. So whatever is freely available now, continue to be available. This could be an additional add-on. You can imagine a service where you get normal email and maybe that has some spam with it. But if you wanted to pay 50 cents a month, you could have a spam-free email box or something like that. But I think that’s a really good concern. This technology isn’t perfect. I think it’s going to have a lot of downsides to it, too. The unbalanced benefit would be…

Peter: You think you could actually pay the person you’re sending the email to, to read it? I mean just as a spam-protection method. Because we already sort of do this with LinkedIn, right? You can buy credits in order to contact people who are far away from you. And people could set, in order to get into my priority inbox, you’re going to need this many coins attached to your email. I don’t know if I like this idea. It sounds kind of, well I don’t know. But it’s fascinating. Sorry, I just said…

Denise: Gaming the inbox. Certainly business models have technology business models have been built around paying the customer. Remember the free PC where the person was agreeing to get pummeled with lots of ads.

Aaron: Yea, those pop-up ads. Yea, I remember that.

Denise: It wasn’t the greatest thing in the world but it could work.

Peter: This is something that’s very interesting with Bitcoin or crypto-currencies where you could build this system wherein you want to build in some costs to make things run better. Because scarcity allows us to figure out how to allocate resources. We would do it based on demand. But instead of having a centralized authority decide how to price things or how to screen things on the internet, you could literally just enact it through a neutral platform. And have the actual user decide what they want to price their time at. I’d rather pay the person who I want the attention of rather than pay the intermediary who is going to be my gateway to getting there. If I had to pay at all. I’d rather not pay at all.

Denise: Right, and maybe it makes sense. Just sort of thought of experimenting this as we are here. Maybe it makes sense if the person who’s trying to contact you is a perfect stranger. Not someone you’re close to and familiar with. That if there is some sort of financial gain involved and you clicking on that email.

Peter: And this is just a great example. This is just a conversation that we’re all having. None of us are going to start this business. But we’re all thinking there’s all these possibilities. We could do it this way; we could do it that way. It’s got to look a lot like the internet looked in 1995 for someone who is really interested in it. Like oh wow, we can do this and we can do this. So those are the many, many possibilities that Aaron’s been talking about and what we’ve been talking about. That we really hope are preserved and that some degree of light-touch regulation allows to continue.

Denise: So let’s look at the micro-payments for content concept. There’s an article out there about Bitcoin saving journalism. This is in our run down at delicious.com/thisweekinlaw/278. All the things we’re talking about today are in there if you want to look in. There’s some great content in there and I really encourage people to read the articles that we’re talking about and that have sort of teed up the show today for us. But how Bitcoin could save journalism and the arts is the article at time.com. Let’s talk about that for a moment and also I guess we can fold into this discussion the group that you’re working with, Aaron, called Monograph. Which is about creating a registry that helps create scarcity for digital art. How can Bitcoin help people who write and create and hope to be paid for it?

Aaron: Sure, so Monograph is a really interesting project. It started by a NYU art professor here in New York. He came up with an amazingly brilliant idea. He has created scarcity in a digital world using the block chain. You know the block chain is a shared database and what it can do is also record and timestamp things. And it can create worldwide property registries. So using this technology is conceivable. We could have a worldwide copyright registry, or a worldwide trademark registry. In one area where there’s a lot of registries is the art world. That’s how they keep track of art and getting appropriate title to art work. And what Monograph does is it basically allows you to take a digital piece of art that you’ve made and pronounce the world and timestamp it so everybody knows that that is the unique, first, original version of the art work that’s been created. And what the people at Monograph think can be generated from that is a market around that. So a lot of artists now are not really painting anymore. They’re using their computers and making this amazing digital art. They have a hard time selling that art. One example is they actually recently found all this digital art that Andy Warhol made. And there needs to be a way to be able to mathematically verify that this is the original. This is the absolute only copy that matters that I’m gaining ownership of. So what Monograph is hoping to do is create this system that allows artists to sell their art work. And create scarcity around something that should have a bit of scarcity to it.

Denise: Wow that’s a fascinating idea. So it sort of bundles in the whole concept of DRM without actual DRM.

Aaron: Yea, it’s not DRM.

Warren: Is there no DRM?

Peter: It’s just a registry.

Aaron: DRM, yea and you know I think the idea is to wrap it around something that I was talking about before which would be some sort of container. Where you could collect payments if it was put on another site or something else like that. And that’s all getting worked out but the idea is really digital content is fabulous. It can spread everywhere. But there is some pockets where scarcity matters. And where scarcity has a premium and using a block chain you can actually begin to create a space for that, and a market for that. But beyond just art, the idea that… maybe it’s because I’ve been a practicing lawyer especially in the intellectual property space. All of these intellectual property registries are highly inefficient. We’re at a point where we can technically build something that’s like a global copyright registry where you can actually just drag and drop something onto a block chain. And everybody around the globe could do it. We could say this is the original work and I’m claiming ownership of it. Or this is the trademark that I want to file and I’m claiming ownership of it. That would create huge amounts of efficiencies. If you even take it beyond intellectual property but to real actual property, you can imagine a worldwide property exchange. It would be just as easy for people to buy a piece of property in the U.S. as it is in another country. If we had a system like that, the matter of efficiency that would be presented would be astronomical.

Denise: Let’s stay on the art metaphor for a moment. I’m an artist. I’ve created an original and I want to create a digital work that mirrors what I would do in the real world. I’m going to create an original and maybe 10 lithographs. The digital equivalent of a lithograph of my original. And so the original’s going to sell for more. I’m going to have 10 that are technically identical copies of the originals. Because that’s how digital artifacts work. You make an identical copy or maybe I suppose you could slightly change each of the lithographs. But then that would be that. And you would be able to control that using the block chain without DRM. And that would be one business model. Am I getting that right?

Aaron: Yea, that’s the just of it. You would record it and be able to transfer title to that record. So that somebody could waive the equivalent of a digital piece of paper and say no, I own the original and here’s my proof that I own the original.

Peter: To be clear, I feel that if the art work-and this is just me thinking through this-if the art work is displayed on a screen and you can see it, there has to be some process that makes that visible. That decrypts it from the block chain and makes it visible. And it’s only going to allow you to decrypt it if you’re the rightful owner on the ledger. So to be clear, I still feel we would need digital rights management of a store to make that visible, would be not visible; it would be a scrambled thing on the block chain or somewhere you would decrypt using the block chain.

Aaron: No you could take every digital file as just a series of bits, zeros and ones. And you can create a unique hash for that file. And that file, that hash is what gets registered to the block chain.

Peter: Once it’s encrypted, you could copy it and send it. You could make a copy of the fourth lithograph and then you haven’t really solved this scarcity problem because you’d have piracy still.

Aaron: There definitely could be people that make copies and change a bit and make it something else. But the point is that the way it would work would wrap it and make it obscured until you have rights to view it. It would just allow somebody to say, here’s an original piece of art work and this is the actual original. And if other people use it, there’s not much you can do about it. But knowing just as a verifiable fact, this is the original the artist intended to be the original. The thesis is, that will create value for that item. In the art world where I think people want to have the original, being able to prove that should enable digital artists to get compensated for their art work at higher levels than they are today. And I think that would be a very valuable thing.

Peter: I didn’t mean to poo-poo the idea. It’s a great idea. It’s interesting you could also try to do it with DRM. Which I’m sure somebody will. If the RIAA ever gets hint to Bitcoin, we’re all screwed right? Maybe nobody will buy their block chain products. But I feel like you could do it with cryptography and DRM, too. And we’ll see if that happens. But I like the just of it, getting the warm fuzzies from knowing you’ve got copy three, that’s cool too.

Denise: Let’s look at the alternate universe of journalism and writing. We could look at music and movies, and TV too. All of which are very freely copied. The rights-holders are up in arms because their works get copied whole or in part without their permission. Readily available elsewhere on the net. Monetized elsewhere on the net through ads. And they want to put a stop to that. They also probably, let’s stick with journalism and keep our brains on one channel here. Say I’m the New York Times or local newspaper or Mashable, or whomever. I am a known brand with a known audience and I am putting out good content. And I want there to be both fair uses of my content and licensed uses of my content. But I don’t want there to be unlicensed uses and I want to be able to control those. How does the block chain step in there, Peter?

Peter: It’s sort of the same idea. It’s that you would use some form of encryption on the data that you’d want to read. And the only way to decrypt that is to have a ledger, truthfully show that you’ve made the micro-payment that corresponds to getting the key to then read the encrypted digital content.

Denise: Or in the case of getting a license like you were talking about earlier with Creative Commons. There wouldn’t necessarily need to be a payment as long as the parties are in agreement that the use is okay.

Aaron: Right, the great thing about micro-payments is that when we’re talking about paying for content, we could be talking about fractions of a penny. We could also be talking about fractions of fractions of a penny. So you want to have some sort of token to actually show that something has moved from being held by one person to another person. But we do this in contracts. We call it consideration and we say the law does not inquire into the actual value of the consideration. We just need to know that there was real consideration given and then the law will recognize that as a contract. So what you could do is have this registry of who read whose things or who borrowed from whose things and modified them. And there’d be this sort of token consideration. This tiny micro-payment that was paid to symbolize that interaction between two people. So we’re not talking about oh you’re not ever going to be able to mix up Beyonce and Gotya unless you pay $50,000. We’re saying you’re not going to be able to mix them up unless you pay 0.0000003 of a penny because we want to immortalize the fact that you’ve done this. So that Beyonce and Gotya, they don’t really need the credit. Some obscure artist knows this has happened and they actually get the credit for the original.

Denise: Is there a privacy concern here? Obviously all of our activities on the net as we speak now without having everything live on a block chain, are tracked as much as they can be by people who want to track and use that data. But it seems like when it is all in a ledger that becomes even more problematic potentially. Or no?

Aaron: I disagree. This is what’s really cool about this. Creative Commons from what I understand-and I’ve never been on the inside of that organization-when they were rolling out the Creative Commons licenses, there was this internal discussion of oh should we try and make sure that people attribute by keeping a registry? How would we do that with existing technology back then in the beginning of the 2000s. And the feeling was gosh, the only way we’re going to be able to do that is with cookies or with clear pixels. And we’re basically doing pretty draconian private surveillance on all the people that use Creative Commons. And that’s totally, like the Venn diagram of people that like cookies and people that like Creative Commons; it’s not really connected. There is some connection. They all work at Google I think. But now we have this alternative way of building a registry. So you don’t need to spy on everyone, IE every time somebody comes across a website without even realizing what they’ve come across; a cookie is saved or a clear pixel is saved. We say no if you want to use the thing in a certain way, then you have to voluntarily transact with the person and immortalize that. What’s the difference between being violated and just living publicly and being social? What’s the difference between Facebook and the NSA? Well, it’s voluntary choice. And the block chain can immortalize that voluntary choice that you made, rather than just immortalize the fact that you accidentally stumbled across something. I think that makes some sense as a distinction.

Warren: I just actually had a question because it seems to me that we’re talking about a technology and it seems like technology is not really going to be good or bad. But I definitely think we can see some negative uses. Like we’re talking about the RIAA and definitely and also talking about potentially; clearly it can be used to protect privacy. I’m also just thinking through some of the examples in that it can also be used to provide really tight lock down surveillance on people potentially. Depending on how the technology wound up being implemented. So my question I think would be from people who are on the front lines of dealing with Bitcoin and crypto-currency and this kind of technology, is how do you set the right norms so that we wind up getting good uses. And I think going back to our earlier discussion, good uses will at least help in staving off bad regulation. How do you sort of set up those kinds of norms that you wind up with the kinds of good uses that allow us to creating cool technology?

Peter: I think that’s why we need organizations like Legal Hackers.

Aaron: Seriously.

Peter: Matching the technologists will build these technologies with lawyers who really want to solve; because you know some of us get into law for the money. But I think a lot of us get into law because we; I think Richard Epstein who is a beloved professor of mine says that politicians and economists and public policy people, they like to take the view from 10,000 feet. And point the ship of policy in one direction. It’s the lawyers that are down in the bowels of the ship, shoveling coal into the boilers and figuring out how to make the whole damn thing work. And Bitcoin and crypt-graphic technologies are a real opportunity to give amazingly powerful technological tools to individuals as opposed to a big organization. As opposed to a government organization or as opposed to a big corporation like Facebook. And say actually we can build this amazingly organized governance just from piecemeal actions of this lawyer working with this smart contract, working with this smart property. And building a kind of interaction amongst those people voluntarily. That’s an amazing thing. That hasn’t happened so much before; not in the world of physical value. It’s only happened in the world of the internet which is this sort of, you’ll have organizations like Creative Commons come up and say oh hey the internet’s here. We can create a way of having standardized licenses that are less draconian than traditional copyright protection. So we can spread them all over. Getting really interesting people like Creative Commons involved in Bitcoin, I think that’s a huge win. Or getting the people who go to the legal hackers meet up who are the net Larry Lessings out there, to hack on Bitcoin and learn how to hack on Bitcoin. It’s going to be amazing; I’m very optimistic. Which of course is why I work at a place like Quinn Center I suppose.

Denise: Yes, let’s talk about some other getting to the good uses encouraging good policy questions. There’s a piece at the Wall Street Journal talking about Bitcoin fighting the Ebola crisis. As if you can find, this is the greatest confluence of headline grabbers. Bitcoin and Ebola in the same headline.

Peter: We forgot ISIS. But we really don’t want ISIS.

Denise: So, Aaron, do you want to take a stab at how Bitcoin and/or block chain technology could help contain the terrible Ebola?

Aaron: Yea, I think that was classic link-bait but it’s really… what Bitcoin can do in one of the first applications people see is really to build a global payment system. It’s really hard now to transfer money around the globe. Just like back in the early 90’s, it was really hard to send a letter to somebody in another country. Email came about and all of a sudden people could communicate really easily from the U.S. to someone in South America, to someone in Europe. As that reached a mass scale, we saw all those efficiencies that we’ve been living in for the past 15 plus years. The same idea, the payment infrastructure for the U.S. and the payment infrastructure for the world, it’s just not there yet. The payment infrastructure in the U.S. went digital through the aged system. And a decade ago it hasn’t really gotten a revamp. And there’s not really one single, global payment rail that everybody can hit if they want to make a payment of some sort. And people think that not Bitcoin as a speculative of currency, but Bitcoin as the block chain and registering transactions. Or another block chain-like system could be something that does that. And that would mean that if in the context of Ebola, we heard there was an awful thing that happened in another country, we could easily make donations and send our money without lots of fees getting taken out in between. And that could really be a wonderful thing. On the flip side, if you’re in a country that doesn’t have a great payment system, much like if you’re in a country that doesn’t have a great communication system-IE the internet-you would now utilize this global payment system to enter into the rest of the world. And the potential for that is really astounding. If everybody in the world could kind of use the same system and could kind of do business using this same pipe, then it’s unimaginable what we can do. We could easily send our products to rural Africa or other places like that which we just can’t do now because we don’t have the infrastructure in place.

Denise: We also… go ahead.

Aaron: I was just going to say that this is something that people are getting excited about. The Federal Reserve is fully aware that their payment system needs to be updated. They have a big initiative about this. Other banking officials that I’ve spoken to, I know other people have as well, are really looking at this technology. At least exploring it to see if it’s something that can be used to help bring us up to date and make sure that we can start doing these things.

Denise: Right, and we’ve been talking a lot on this show over the years about machine assisted contracts, streamlining the contracting process. We’ve touched on it a bit in this show today with artists and creators. And if you want to easily grant a license or maybe there’s a micro-payment involved. Maybe there’s not. But taking it beyond that to the more general world of contracting we’ve been talking about: smart contracts, a bit on the show. And I want to get a little deeper into that here and have you guys explain to me and our listeners and viewers why the block chain really puts that on a fast track. Why don’t we start with Peter?

Peter: Okay, so we’ve been talking about it in the abstract. And I supposed getting more into the weeds is helpful. Although it starts to get difficult to explain. What I like to say is just fundamentally speaking, what cryptographic currency has enabled us to do with block chains is as I said provably show that something existed in somebody’s particular address. They’re called a public address, to which only they have a private key to access the things in that address. Has moved to someone else’s public address and now they have the only key to that thing. And so that’s the basis of value transfer. What’s actually happening is there’s this little phrase that gets sent out to all the computers on the Bitcoin network, or the Bitcoin protocol. And that phrase says Peter transfers this much to Denise or to Aaron or whatever. And those computers, some of them are called mining clients and they’re just software that some people choose to run. And the software then looks at what I just said, I wanted to send this to this, and they say okay I’m going to add that to my list of everyone’s transactions that are happening right now. And they add that to this list and they solve this difficult math problem that was set up by the last person to mine and to describe all the transactions. And that happened somewhere between one and 10 minutes ago, that last person described all the transactions. And they set up this math problem. And now this new person is doing the same thing along with all the other people on the network. Trying to describe all the transactions in the 10 minutes. Solve the difficult math problem in order to write the next blah in this ledger of all the transactions that are happening. And the first person to do it, and it’s very difficult to predict who will be the first person to do it. Because solving that math problem was so difficult that if one computer was working on it by itself, it could run for thousands to millions of years. But if many, many hundreds of thousands or millions of people are working on solving the problem, then we know with some statistical certainty that within about 10 minutes, one person-we don’t know who-will stumble across the answer. And they will write the actual ledger. What they’re actually writing down is normally this simple sentence that says Peter sent Denise this many coins. But that’s not all Satoshi Nakamoto, the anonymous inventor of Bitcoin allowed for you to actually say. You can say more complex sentences, it’s not just Peter sends to Denise this many coins. It’s Peter has these coins in his public address and has one key to this public address. Aaron has this other key and they turn the keys simultaneously, and only when they turn both their keys do the funds actually move to the next person which is Denise. So you can build these sentences of how you want value to move through. And a sentence can be as simple as one person to one person. It can be more complicated, two people to one person. If the two people agree. Or it can involve variables like time, like two people agree and this time has happened. So the Bitcoin network can keep track of time and say at this date in the future it should go through. And finally you can also in theory, invoke external variables out in the world. These are called oracles sometimes. So it would be the contracts going to go to query a price from say the New York Stock Exchange ticker. And say when the price of this hits this, then the transaction should go through. So you get to start to see all of the elements, many of the elements of common law contracting here. If this contingent fact realizes, then this result should happen. If this doesn’t then this result should happen. Then you can set that up all X-anti so it will happen, deterministically through the math. Now you can’t necessarily write a complete contract with all the squishy human variables that we find important like the particular nature of a warranty or when a product is broken or not broken. And therefore you deserve a refund. But a lot of the in between as far as where to go and get the refund can be effectuated automatically. Say you had somebody who is appointed as an arbitrator to say yes that product was broken actually. They turn their key. And that’s what actually makes the refund happen automatically. And you can pick that person automatically.

Denise: Wow that is so fascinating. And just from your description, the most obvious thing that comes to mind is a real estate transaction. Where what you’re describing is the escrow process where people put things into a trusted third-party account for holding purposes until a bunch of conditions are satisfied. And then the transaction closes. And it sounds like if block chain technology gets involved in a lot of contracts, the escrow people are going to be looking around for something else to do.

Peter: Well yes and no. They’ll just have better fools to do their job. Right now they have filing cabinets full of people’s things that we have to trust them to keep good order of. But there’s probably still someone who’s actually a real person who’s looking out and saying the transaction went south or the transaction did go south. So that person still has a need to exist. We’re still going to need to know whether they bought the money pit and the Victorian house actually had no floor. And that’s going to be a real person still. And they’re going to have a better tool to do that. It’s just like letter writing didn’t stop happening when we got email. It just got easier. Someone who writes letters or does talk shows for a living can now do it at their home as opposed to doing it at an inefficient corporation.

Denise: So tell us exactly why, Peter, is your parents’ deed in the block chain?

Peter: I actually did that. Warren will appreciate this. I did that in order to show that slide at the legal hackers meet up here in D.C.

Warren: Love that.

Peter: If you’re in D.C. you should show up. They do great stuff. But I had talked about how my parents recently bought this house out in the eastern shore of Maryland and because I was a dork who was still in NYU Law at the time taking a property class I wanted to say well how do we know that we own it. And if you’ve taken property law, you know there is a grantor and a grantee index. And the amazing thing about a grantor index in the context of this discussion is that it looks like the block chain. It’s just the block chain with really old documents that say bequeaths to Van Valkenburgh from Bub. I think that’s actually the final link in the block chain of this property registry, is from someone named Bub to my parents. And the funny thing is, if you keep that slide up, you can see in the upper right hand corner in the deed on the left, there’s some text there. And it’s too small to read, but it’s actually all the money that had to be paid in order to make this thing get saved in a Talbot County clerk registry. And it’s $5,000. It’s not a huge fee. It’s $5,000 as compared to the value of the house which is somewhere around $300,000 I think. Not to air my family finances on the internet, but I just did. And so the really tricky thing about the grantor-grantee index, and the reason it exists, is that you’ll have people who show up and say actually I had this deed. I’ve always had this deed to this house. And you got a deed from someone. I don’t know who you got it from. He gave it to me before he gave it to you. And that’s the double-spending problem in computer science actually. That’s the exact same thing that Bitcoin was built to solve. Was to create this provable record that says no, actually you can’t spend that Bitcoin twice at two retailers. You spent it once and now we know you don’t have it anymore. And so it’s kind of fun. A fun way to explain Bitcoin to lawyers I think who actually are geeked out about grantor-grantee indexes. Is that you can do all this with a block chain. And you can do it lightning fast and without the $5,000 title fee. A much lower fee, like the fee you would pay as a retainer to your family lawyer who knows how to use technology.

Denise: So we’re going to make dad’s deed the second MCLE passphrase for this episode of This Week in Law.

Peter: Its dad’s and mom’s. They’re joint.

Denise: Mom and dad’s deed. I will take either dad’s deed or dad and mom’s deed. And well again, people are already, I just keep coming back to if the block chain becomes the transaction registry for everything, then doesn’t that take a technology that thrives and is exciting because of its decentralization, and make it a centralized resource for a whole lot of data?

Aaron: It’s not going to be one block chain. I think most people are assuming there’s going to be multiple block chains. So like right now, just like we have different databases that we use but they’re just locked behind a company. So if we want to use eBay, we have to go to ebay.com. And enter into a transaction with another person who is also registered with eBay. And then all that information is stored in eBay’s database. In the future, you could just have a shared block chain that nobody really owns that facilitates all the same transactions that eBay is doing. So the only person under the law person who’s taken out of the equation is eBay. And now you just have a shared resource. And it’s kind of facilitating the same type of transactions that have happened. And people are already building this. You can go and look up a project online called online bizarre. And this is what they’re building, a completely decentralized eBay. Messaging systems is the same thing. Right now we go to Google and if we use Gmail, and we send a message. It records in a database. And then somebody else accesses that record in a database. You can have a messaging block chain which just facilitates that same transaction without the need for it to pass through Google’s servers. It could just be on multiple different servers all around the internet. Dropbox, Uber, all of these companies. All they really are, are middle-men. And they all are running databases and I think over time we’re just going to see a lot of these middle-men either run decentralized databases and just kind of be the managers of that, or their business models are going to get tightened to a point where it might not be feasible for them to really operate anymore.

Peter: And I’m not too apocalyptic as far as predicting the intermediaries for disappearing. As I said we’re still talking about, it’s like we’re talking about the internet in 1994. But my half-baked prediction is actually we still keep intermediaries and as we were just talking about, they’ll have a decentralized database. But they still serve a purpose and that purpose is going to be creating the user interface or the user experience to actually access the decentralized database. And that’s a very important thing. Right now when we talk about these things, these things can to some extent be done by typing very long strings of characters into a computer terminal that interacts with the Bitcoin client that interacts with the Bitcoin network. These are all things that my grandmother is frightened by because she thinks her computer is watching her in the middle of the night. It’s true. She does use computers, well you know. But how do we get my grandmother to trust something like this and it’s going to be a really good user interface. And that’s something that robots don’t do well but people still do well. So Uber might decide they’re still going to connect drivers with people who want to be driven. But they’ll be able to negotiate with each other in a decentralized marketplace for all the cars in the area. But Uber’s still got a very important job. They’ve got this job of building the smartphone app that interacts with that decentralized database, making it look good, making people feel comfortable with it. And maintaining it, and even marketing and advertising. Those are very important things as well. Half of our economy must be persuasion. I get the feeling, and that’s not really a waste. That’s people talking about what they care about.

Denise: I hear people talk a lot about Bitcoin and block chain-related technologies as being a solution to security and surveillance and everything else. And maybe you can expand a bit on that because what I’m hearing from our discussion today and my understanding coming into it is that when we’ve got a registry that it all relies on having a very public registry of information. That is transparent and verifiable. And part of the way people rely for good or bad on privacy today is these various silos of information where their data lives. And the fact that it’s not public and transparent. And that not only the people facilitating the transactions have access, but really anyone has access to information stored on a block chain, don’t they? So does this just create not… okay well enlighten me then. Because I’m envisioning this whole world of data mining enterprises that are all based on looking at transactions on the block chain, no?

Aaron: Yea, no, so here’s the trick. And here’s what’s really clever about it. It’s that everything on the block chain is wrapped in public-private key cryptography. So there’s a public facing event that everybody knows occurred. But the substance of what that event is, nobody knows. So for example, here’s an example in terms of privacy and how people are talking about how a block chain could be used to enhance privacy, this is what it would look like. Let’s say there was just an identity block chain. This was a block chain that stored all of your personal information that you usually put into websites. So it has your name, your last name, your address, your credit card numbers. Maybe multiple credit card numbers. Maybe additional people who are authorized to use your credit card or other information. And that’s all stored on a block chain of some sort. And everybody’s information is stored there but nobody can look at each other’s information. So I can’t peer in and see what your information looks like because it’s encrypted. I don’t have the private key to unlock that lockbox to figure out that information. And I don’t know what Peter’s information is either. And you extract that for millions and millions of people.

Denise: If you do have the key, that’s when you can look at Peter’s parents’ deed?

Aaron: The real value that this technology can pass along to companies is that if there is an identity block chain, then they wouldn’t have to worry so much about security. The way a website could work, let’s say you’re logging into the eBay of the future, this decentralized eBay. They could just say identity block chain, is this a human being? And the block chain could send back a ping that says yes. Or identity block chain, I need the credit card information for this person can you just give me that? And then the block chain could send it back, just the credit card information without all this other data. And they would never need to store this data so hackers would have a much harder time going around and finding all these vulnerabilities on all these different sites. And that could save companies a lot of money. When J.P. Morgan lost 70 plus user account information, that’s a serious problem for them just in terms of sending out notices, it’s going to be very expensive. I’m sure if they had a solution like this and it was actually built, and this is a solution that isn’t build but people are talking about, that’s something they would at least be interested in and integrating in the same way. So that’s kind of how privacy could look using a distributed technology like this.

Denise: Peter, we’ve already splashed your parents’ property information all over the internet as you mentioned. But can anyone else who’s interested in getting that information, can they go to the block chain and get it? Or is it cryptographically shielded from them?

Peter: So what I actually did, like a real decentralized grantor-grantee index doesn’t yet exist. It would be something that you’d hope either a law of services corporation in a given area would help to start build and maintain and help people access. Or it would be something that a local government maybe chose to adopt as their way to securely and authoritatively describing the sequence of deeds and records, and what owns what, when. What I used is something much more primitive. Again, internet circa 1995, it’s called proof of existence. I think it’s proofofexistance.com. But if it’s not there, just Google Proof of Existence. And that service is much simpler. All that service does is, you take a document and what it will do is it will look at that document. The bits that are in that document and it will create a unique cryptographic hash which is sort of like a unique scramble of that document. And it will put that hash which is just a way of saying there’s no way to get this number by guessing. Unless you have the input. So if you then have the deed as an input and you hold it up against the hash which is on the block chain, you can say that’s that hash. And so you provably say the only way that hash only got into the block chain at the time that it says it was in the block chain was because the document existed. If the document hadn’t existed, if you uploaded a different document, the hash would have been different. Because the hash looks the way it does and because it was in the block chain two years ago, this deed existed two years ago. So actually right now, it could be used by a lawyer. If somebody else came up and said oh that deed says Bub to Van Valkenburgh two years ago. I have a deed that says Bub to Van Valkenburgh one year ago. And you’d say, well I mean we have to… okay so I set it up a little bit wrong. If the deed doesn’t say anything, you know just imagine this deed that didn’t have a date. It’s a really lousy deed. And if there’s someone else that says I have a deed and it doesn’t have a date either. At least we would know because we can see it on the block chain that my parents’ deed must have existed in order to create that unique cryptographic hash two years ago. Then we can say okay, because we know yours is two years old, this one that doesn’t even have a date, we’re just going to ignore it. This is what a judge does when we’re talking about transferring property. They look at all the additional of when something existed or when something didn’t. And they look at the statue for the local jurisdiction which is either a race statute or a race notice statute. Like the first person to get to the county courthouse or the first person to actually know that somebody else had previously purchased it. And the judge then has to make a choice. So right now it’s only useful so much as a way of proving that a document existed at a certain time. Although that has implications for say the rules of evidence, of heresy. These sorts of things. These tools are already becoming useful. They’ll be much more useful when we have a block chain that as Aaron said will be a dedicated block chain possibly. Or maybe it would be a way of interacting with the Bitcoin block chain. That is purpose-built to actually create authoritative records. All the judge would need to do is say in this jurisdiction, we recognize this decentralized block chain as the way of authoritative or declaring ownership. This makes the judge’s job very easy. As he can look at it and say this happened, this happened, and this happened.

Denise: Okay. We’re already talking about some privacy-related issues moving from our policy discussion around Bitcoin into the privacy and security aspects of the technology. We have one other privacy-related story we’re going to cover before we get out of here. So let’s play the bumper, shall we? Warren, this is a good opportunity to consider how the Europeans might relate to some of the issues we’ve been discussing here today. And to more specifically hone in on the right to be forgotten and how it’s impacting Google and others. But Google, specifically gets in the news a lot. As it tries to comply with that law. Can you bring us up to speed a bit?

Warren: Sure, so Google actually released a report, I think it was today, very recently at least, just sort of detailing basic facts and figures on its right to be forgotten requests under EU Data Protection Law. There’s a recent high court ruling in the EU. Basically the EU court said, as many of your listeners are probably aware, that a person has the right effectively to be able to tell a search engine or similar websites to stop linking to particular content. To effectively get rid of that record where there is a sufficient balance in favor of the privacy rights of the individual versus the free speech right of actually having that content up there. So what Google’s had to do as a result is sort of implement basically something like a DMCA take-down system for these right to be forgotten requests. So they’ve released some data just now, sort of detailing some of those things. I think they got something like just under 145,000 different requests from people who are making personal data requests requesting that based on their rights under EU law, Google has to pull down basically links that come up when you Google so and so’s name in combination with certain other search terms that might pull up something that’s embarrassing and no longer viewed as relevant under EU law. So I linked to that article. I thought it was pretty interesting also to compare that with an article that Jeffrey Tubin had written for the New Yorker that sort of broke down the disparity between U.S. law and EU law in this area. Because obviously in the U.S. we have the first amendment. Make it really, really difficult to implement a regime like this. I love that title: the solace of oblivion. Which is somewhat dark. It’s a very good read. It’s also very interesting; it starts with the story of this tragic incident of a father who lost his daughter. Then actually the photographs of the death scene wound up leaking on the internet and he feels that he has really no control over those photographs. And the argument is sort of contrasting with the EU where theoretically at least-and this isn’t actually even necessarily true under EU law-he might have the right to be able to go to Google and say I don’t own the copyright on these photographs. So I can’t take them down under the copyright law. But if there’s a personal data protection right then I can tell this search engine or the center intermediary to stop linking to them. Or I can ask them to get rid of the particular content just because it is relevant and effectively offensive to these privacy rights. So it’s just an interesting story from my perspective. It’s clearly different regulatory regimes interacting with the technology of the web. And sort of creating these little effectively legal fiefdoms where you have different regulations and different abilities as a citizen in one state versus a citizen in another. So I just found that one to be a pretty interesting story. And I think it’s going to be important as we keep going forward under these regimes.

Denise: Well now that I’ve got block chain on the brain, I’m wondering if there is any way block chain technology can help Google out in trying to comply with these requests. But I suppose that would require Google to somehow put on the block chain every single web page that it has indexed. And that it continues to index on an ongoing basis. And maybe that’s not practical. Or maybe it is. Who knows? Anybody want to take a stab at that, Aaron?

Aaron: I think that’s conceivable. I think you’ll start to see block chain technology used in search. I really do. It’s just a good database. Maybe Google would start to do that.

Denise: Martha Stewart would approve. It’s a good database.

Peter: Maybe you could also transact with people in order to get records taken down. Probably be hugely expensive to unilaterally negotiate with every person who has a record of something you don’t want up there. But I don’t know.

Aaron: One thing you might want to think about too, in terms of Google, they’ve got to basically verify in some way. It would be ideal, I think they just do it now based on a certification. But basically you’ve got to verify that this person has the rights to claim that content being taken down. Maybe there’s a Bitcoin element right there. That this person is who they say they are.

Peter: It all makes me so nervous because as you said, so privacy is just the ultimate and good. Everybody has a different definition of what they have should be private or not private. Or public. And the negotiations of that are difficult from an I’m going to pay you to take stuff down level. And they’re very difficult from an I’m going to use government policy to take stuff down. Because that’s how we get all these legal fiefdoms. I’m sure we’ll see people try these things with block chains. As we discussed, they’re very powerful. I can’t imagine an implementation that would achieve anything like universal ability to take down all versions of a thing. These machines just really weren’t built for that. And I think they’re fighting history when they try to really aggressively enforce something like the right to be forgotten.

Denise: Yep, excellent point. Alright, well we’re going to get out of here but not before we give our tip and resource of the week. Our tip of the week this week is real simple. It’s hack the law. If you are listening to this show, it’s because you’re either a lawyer or a technologist, or someone who is interested in technology who is also interested in the intersection of those two areas: law and technology. And how they can battle with each other sometimes. And help to negotiate those waters. So get involved if you are one of those people. If you’re looking for more information about legal hacking, there’s a really nice by Ed Sone at Above the Law, called How to Hack the Law according to Morpheus. And the title refers to the fact that Ed Sone asked Phil Weiss, the founder of Legal Hackers-one of the founders-if Legal Hackers was a character in the Matrix, who would they be. He said oh Morpheus, no doubt. So that’s sort of sets things up nicely. And there are already formalized legal hacker groups as we were talking about in New York, D.C., also Los Angeles. NC, that’s North Carolina, Warren?

Warren: Yep.

Denise: Yep. And also Stockholm. So obviously there’s a lot of the world that still needs to get the memo on this. And if you’re someone in one of those non-represented areas, then this is a great opportunity for you to get involved. Always look at how we can make law and policy work more nicely together. And Warren, you guys are doing a great job at doing that.

Warren: Thank you. And definitely there’s a lot of other groups out there, too. There’s a lot of interest in law and technology right now. It’s very cool. There’s just so much ground-swell of general interest. And people who want to, like you said, hack the law, and find ways to make it work in ways that haven’t really been typical or possible beforehand.

Denise: That’s absolutely true. We try to do it, as you mention here every week. Our resource for you this week is given to us by Peter. It’s an article called What Smart Contracts Need to Learn. It’s at Lawbitrage. Peter, can you tell us a bit about this and why it’s a great resource?

Peter: Yea, so that’s from Homan Shidab who’s at New York Law School. I think it’s a very sharp and reasonable take on smart contracts. You’ll find some people out there who are true evangelists who are saying we’re going to do everything on the block chain. It’s going to be amazing. The singularity is near, etcetera. And Homan’s tone is very careful, neutral, considering the technology. He lays it out in some detail for you to see. And he also goes through what he thinks are the limitations. Especially that sort of squishy human element that no matter what, we’re always going to be contracting between two people. You’re going to need lawyers to be negotiators. And that’s just, this is great synergy with Warren and Legal Hack and what Aaron’s doing with his clinic at Cardozo. We really need to be pairing young lawyers and not like the kind of lawyers that are out here in D.C. I mean some of them, but not the ones that are like marching up to Capitol Hill every day. The ones that are in the local county courthouse or just trying to make contracts between people and make property deals happen. Those nuts and bolts lawyers that are down in the boiler room of the ship shoveling coal, those are the ones that are going to really benefit from this technology. And if our society can organize itself better and more cheaply by giving those people the technological tools to do their job more authoritatively and better, it’s going to be a wild ride.

Denise: Learn to code and definitely make yourself heard. If you’re a consumer and not a lawyer or a coder, because goodness knows anybody who’s been involved with a car transaction or real estate transaction knows that our contracting process as it exists today is not exactly state of the art. And it’s a big old pain. So we do need to make things work securely and well. And we may have some of the secure down now. But the well and streamline part definitely has a ways to go. So make your voice heard on that front. And thanks, Peter for the pointer to that. And thank you all so much for joining me today on This Week in Law. It’s been a really fascinating show. I’ve learned a bunch. I’ve got even more I want to go research and learn even more about. So Warren Allen, thank you so much for joining us again. It’s great to have you back on the show.

Warren: It’s awesome to be back, Denise. Thank you so much for having me! It’s really cool every time.

Denise: It’s wonderful to have you. And are there any… I know we just had a D.C. legal hackers meet up. And then there was something about, I forget. It had code in the name.

Aaron: Code the deal, yea.

Denise: Code the deal. Exactly about smart contracts, right?

Aaron: Well it was just transactional law in general. We had gotten a bunch of people again in a room, had a legal hackathon where we want to put 16 different projects and actually presented. And we gave some great cash prizes to three really great projects. And really everything that we wound up seeing submitted was very cool. And made us think. The winner wound up being a program called Red Line. They designed a prototype for effectively a better way of doing the whole Red Line contract process that we all know and love so much. But doing it in a simpler way where you have live collaboration, you can screen out comments so that you can communicate internally on one side. And your opposition can communicate on the other side. So it was a very cool project. Again, Phil Weiss, who is the founder of Legal Hackers. I’m one of the organizers and he is too. But we both were there from the beginning pretty much. But he deserves the credit for coming up with the idea in the first place. And he was really a lead on this too, working with Nicks and Peabody, the law firm. And Aaron Yold there. They put this event together. We helped give a lot of support but it was really a very impressive event that wound up happening. Oh and then I should also mention that we have got an upcoming event on October 23 at CT in New York. That’s going to be legal tech demo night. So lots of legal tech happening in the city.

Denise: Thank you so much, Aaron. And keep up the great work. Aaron, thank you so much for lighting the fire under me to do this show today. I’m so glad that we’ve gotten into these topics. There’s obviously a lot more to unpack but at least we touched on them.

Aaron: And thank you very much. I really wanted to thank you for having me and everybody else and bringing attention to this important topic. We’ve also at Cardozo, we’re bringing superintendent of the Department of Financial Services to the school. And he’s going to be talking about the bit license and we’re going to be talking about the s’more. I can post a link and we’re live streaming it so anybody in New York or anywhere else can view it! We have a great all-star panel that’s going to follow up his talk to continue this discussion.

Denise: Should people go to the tech startup clinic to go to that link when you do live stream it?

David: I’ll post it in IRC and maybe to Delicious, too.

Denise: Yes, just as long as you put it into IRC, I can pick it up from there. And I’ll make sure it gets into our discussion notes for this show. Peter, it’s been really thrilling to meet you. Tell us a bit about Coin Center. I know it’s just founded last month, correct?

Peter: Yea, me and Jerry. We’re pretty fresh-faced a couple other people who are in this space like the Bitcoin foundation; we’re not associated with them but there’s certainly so much work to be done that we’re happy to be a resource for educators. I mean an educator for policy makers and a resource for policy makers. And we’ve got a long and hopefully prosperous road of law and crypto currency ahead of us that we’re just going to hope to uncover. As I’ve said before, the internet in 95 is a good metaphor. So hopefully we can help the community repeat some of the successes of internet policy and avoid some of the pitfalls when it comes to crypto-currencies.

Denise: Good for you. It’s definitely a necessary role so thanks so much for doing it and for joining us today. I’ve been thrilled to chat with all of you. Thrilled that all of you listening or viewing can join us as well. You can catch the show every Friday. It starts at 11:00 Pacific, 1800 UTC. So you know, late morning or early afternoon depending on where you are in the U.S. Or if you’re international, we’re thrilled to have you join us too. If you missed this show live or you can’t make it live every week-that doesn’t matter-we have all our shows out there on demand for you in various venues at twit.tv/twil. That’s our main page. You can find us on YouTube. We’re This Week in Law there. We’re on iTunes and on the Roku or wherever else you like to pick up. We’re there for you. And also we’re there on the social networks as well. Great way to get in touch between shows. I’m D Howell on Twitter. The show has a Facebook page and also a Google plus page. If you have a little bit more to say, those are good places to do it. Also you can email me. I’m denise@twit.tv, great way to get in touch and let us know. If you’ve thought of other applications for the block chain, and as a result of listening to this show, let us know. What other topics that you think are right in our sweet spot that we may have just blown by up to this point. Because I love hearing about that and fixing it. And continuing to monitor things that are important as they unfold. So let us know what’s on your radar and we’ll put it on yours. What else should I tell you? I think that’s about it. We’ve done a great show today. We hope you’ve enjoyed it and we’ll see you next time on This Week in Law! Take care.