 So finally, we are going to close this event with a workshop tutorial about computational law. So I'm going to introduce two guys. One is Brian, the other is DASA. They belong to the connection science group and also human dynamics. And then they are experts in MIT about how to mix the world of technology, like photography, like blockchain, and also law, which is like a big thing that we don't tend to like care, you know? But it's like a thing that really matters, right? So without further delay, I'm going to like let them like start. Speaking of technology, we're getting the clicker. Yeah, so I'm of the two. I'm DASA. This is Brian. I run something called law.mit.edu, which has been the rapper for computational law research here at MIT. And we're housed in the Human Dynamics Lab, Sandy Pentland's lab. And we're about to launch a new publication, the MIT Computational Law Report, which you'll hear a little bit more about in a moment. But this research into robotics, AI, and law actually goes back a ways. You'll hear toward the end of a presentation, roots back in 2011, when we started modeling autonomous legal corporations and sort of a steady flow. And we're finally at the point now with the launch of this publication, where things are coming together. So it's the perfect time to speak with you about it. And we want to hear back from some of you your impressions and questions as well. So with that, Brian? Let's take it away. Boom. So yeah, we have this idea of like DOWs plus robots equals, you know? And what we've really been working on lately is this idea of automated and autonomous legal entities. And so what that means is, you know, we have to kind of embed the legal thinking from the get-go so that we can optimize the protections of the legal system with these new forms of entities that people are coming up with. Because there are going to be all these different questions that start to arise. So who owns the entity? Who owns the IP? How is anything produced? How are any proceeds divided? How are material sources? Who is capable of entering into contracts for a DOW? Like what happens if the DOW does something illegal? What happens if the DOW goes bankrupt? Like these are all things that you don't really think about when you're setting something that's like really creative up. It's mostly on the back burner. And so we wanted to start showing why this type of thinking is important to like get in front of... It's important to get in front of this type of thinking ahead of time instead of when everything hits the fan. Right. And so one of the kind of questions embedded here, I think the way we phrased it is who is capable of entering into contracts for the DOW, like on behalf of or the behest of the DOW. And that raises the sort of deeper, almost philosophical question, when if ever is a DOW capable of forming contracts itself? When would or should or could a DOW be considered and treated as a legal entity itself and therefore capable of forming contracts, enforcing contracts, having them forced against it? And so the answer to this kind of... We break it down into a few different pieces, but one of the key pieces that you were touching on there was the idea of legal personality rights, the idea that you can have like a limitation of liability that creates a separate legal entity apart from yourself and gives you something that you can kind of hide behind in the form of liability limitation. Then we get to the notion of investment securities, contracts and intellectual property, contracts and agency law and then tort. And then we have some different use cases that we walk through and kind of talk about how they apply. So this is the roadmap for the next like 15 minutes, not for 2020? So generally like the container of legal personality rights requires a few of like these common ingredients. So registration with the state, identification of certain governance mechanisms, like with a DOW that could be like the voting mechanisms or things like that. The identification of the individuals who are in charge of administering the governance mechanisms. Certain states call this a custodian. And then the legal protection within some narrow purpose. So you have to be operating within some specific legal purpose and you only get these protections if you fit within that container. And just to break this down a little so you know what we're talking about, registration with the state speaks to like how many people have ever formed a corporation or an LLC? So it's mattering. So you know there's that step where you somebody goes to the Secretary of State's office if it's in the United States, fills out a form. You know there's always a check involved. They need their money and then they will like create the corporation for it. You get a corporate ID, you could check the state database of corporations and you know the name will show up along with like who the directors are. That's this registration process. I think it's noteworthy. We had a kind of a law and technology conference here not long ago where one of the presenters was very interested in a different way of creating legal personality that doesn't require registration with the state initially. It's called the Massachusetts business trust. So that just requires a trust agreement where the parties to the trust sign something and it's a legal entity. When we explored it it turned out you know in order to maintain its existence and the pay the taxes and to dissolve it you ended up having to do the registration with the state. So it does seem like that first bullet is something that's within the scope of what an automated system with a capability we need to have in order to incorporate itself. Yeah and another thing to point out I think at this stage is that some of these protections are at the state level and some are at the federal level. So in the U.S. you know you'll have different state protections that are related to like business entity but you'll have federal protections that are related to like securities law. So it's important to know like which domain you're operating in in order to kind of like optimize for that domain. We should probably disclose we're operating within those different levels we're very much U.S. centric for this conversation although as you'll see toward the end we've been dabbling and collaborating with people in Europe and other countries. So one of the most progressive states in this regard is Vermont. They have a BB LLC statute, a blockchain based limited liability company and with that you register with the state. The state reviews are operating agreement to ensure the safety and access of the permission protocols. You have a summary of that mission and purpose like I talked about and then there is some indication as to whether the BB LLC is fully automated or partially automated and then you specify the voting protocols and the way that this is played out so far with this organization called Dorg they set up their operating agreement, they paid the fee, they indicated what their different governance type was. You can see. Decentralized ledger. Then they describe it. And so I wanted to highlight that but it's not showing up very well. But yeah and then other states follow approximately the same recipe that I laid out. So with Delaware, the way that they got to the end result is a little bit different. Instead of having a standalone business entity they allow the use of electronic networks or databases to administer different of the existing corporate functions. So stock ownership, books and records, voting and one thing to note that's potentially interesting here is that Delaware Corporate Law permits the registration of series entities so if you have an entity that's nested like a thousand times as like these shell entities you can set that up theoretically in the state of Delaware. One way that this is playing out is the law which is a legally compliant DAO for investments and specifically with them that would be another instance where you would have to also go through the IRS's requirements for securities registration and I think all the members of this DAO have to be accredited investors so that's like an additional protection that you get because you're an investor in a company and so you have to meet these even more advanced even this more advanced special. We should probably say the DORG is a project from kind of a civic hacking group in Brooklyn. The Lau is a project of consensus and they're open law spoke. We've got a bunch of sites if you want to follow up on any of this. And these slides will all be available. I'll tweet a link out to them so that everybody can just use them and play around with them. And then Wyoming has done something similar to what Delaware did. They set it up so that certificate tokens could be issued instead of stock. One of the interesting things that Wyoming has also done is they set up a special purpose depository bank for crypto transactions. So now you have a specific place you can go where you can kind of fold these things using some smart contract framework as a way to keep assets and keep track of all your crypto assets essentially. And one of the ways that this is kind of playing out is through LASO DAO. I believe they're somehow involved in co-working as well along with DORG. But this kind of gets us into the next bit that I was talking about earlier with investments in securities. This is governed by the IRS. The big question here is something a utility token... SEC. Oh, SEC, sorry. That was a mistake. But the big question here is, does it meet the Howie test? Is there any... Are you putting money into an entity with the expectation that people in that entity will do work on your behalf and give you some return? And so if so, you need to make sure you're compliant. Otherwise, the SEC can go after you and you can do something like what pocket full of quarters did where they sought a new action letter that were utility instead of security. And they're one of only two companies in the U.S. that have successfully beat like a no action letter. So just curious, who's heard of a no action letter? Okay, so just FYI, what we're talking about right now is you could just go and do something and believe or hope it's not a security and discover later that the Securities and Exchange Commission believes it is and then they can launch an enforcement action against you. That's a bad day. On the other hand, could sort of get proactive with legally structuring things. And that's very much the spirit of how we treat computational law as designing legal processes and engineering law and legal processes up front. And one of the mechanisms you could use in this case is called a no action letter. That's basically when you go to the regulator, SEC, if it's federal, there's also state securities regulators, and explain in detail what you're planning to do and ask them if they will basically issue a no action letter. And they sometimes will. And that will give you almost like a little safe harbor to do this. Like they know what you're doing in advance. They agree that it's okay. And sometimes they'll issue more of these when they want to encourage more experimentation. During a bunch of legal hackathons that we had done a couple of years ago, including creating like revolving loan funds and other investment vehicles through DAO's, part of the criteria for hacking teams was that they have lawyers. It was a legal hackathon on their team and that they structure a request for a no action letter right with their code. So describing and documenting what the code is, who the investors would be, what the protections and safeguards would be and so forth. So looking at ways to embed that within the process. And here's an example of a company where they've actually got no action letter from the SEC and this is a good practice when you're creating your robot AI investment funds. Exactly. The next kind of issue that we can run into and I think there's a touch on something that's kind of like a theme is when you're more proactive, you have more flexibility. And so with regard to like the intellectual property rights, you can set a lot of the stuff up by contract and a lot of the stuff is set up by contract, a contract among the members, a contract between the individual and the state, some sort of letter that functions as the proxy of a contract between the people and the SEC, for example. And with intellectual property, it's especially interesting because you can start dividing fractional ownership rights using ERC 721 tokens and then different people can programmatically verify that they own part of an entity or part of the intellectual property of an entity or however you want to slice it. And that really gives people more granular control over all of these things and it provides new opportunities that people hadn't had before. And so in another context, if you look at contracts and agency, this is a typical example of what an agency relationship is. You have a principle, the principle has the agent do some task, the agent goes to a third party to effectuate that task and they can either be acting with express authority, inherent authority, or implied authority. And basically what that means is I can say, hey, you're authorized to go to buy a bunch of watermelons and you have the actual authority to go buy the watermelons. I can say you have the actual authority to go buy produce and so by buying watermelons you would have that inherent authority or you would have inherent authority to buy produce. But if I said you can go buy furniture and you come back with a bunch of watermelons and you work at a furniture store or you work at a produce store, you would kind of have that inherent or the implied authority of having me being at a produce store. It would make sense that I could actually go and buy that and so the third party wouldn't have to go after the agent or they wouldn't have the ability to go after the agent in that situation. Yeah, perhaps. So just another example that may be even more familiar than furniture and watermelons is like a house. So you've got a broker. It's not uncommon to get a broker to sell your house. The broker is a broker or an agent, like literally a real estate agent. So that word is what we're talking about and so you'll usually have an agency agreement with them and they're authorized to do certain things like go and solicit offers and maybe even do more than that and maybe get pre-approvals on loans in some cases so they can go deeper. You could structure it even more deeply to give them a like a letter kind of blank on the word but you can make them like what is it called, give them... It essentially certifies that you're authorized. What is it when you... Power of attorney, thanks, POA. I was trying to do letter. It's like it's not a letter of attorney. You can give them a power of attorney so they could actually do the closing documents for you. So these are all like different degrees of authority that a principal gives an agent to act on their behalf for the third party and one of the reasons this matters in this context is when you've got let's say people that are operating a robot with AI that's maybe a DAO to do transactions whether it's investment fund or we'll show you some other interesting use cases like a publishing company and other things like that then that entity is going to be interacting with third parties. It'll be doing things. And so we've got this sort of... There's this whole ancient legal framework of agency law which looks like this and really what it comes down to is what are each of these parties responsible... what are their rights and responsibilities with respect to the other parties and a big question is like would the third party have known that this agent was authorized to show me the house but not sell me the house to get a furniture but not watermelons or both or one or the other? So there's a question there and we'll talk later about some of the ways we think structurally this can be designed into a legal process to clarify it and have things run smoothly. Yeah, because there's certain ways that you can start granting authority as among the members of the organization such that all of these things are very narrowly scoped and clearly understood so that you don't have the edge cases where things go terribly terribly wrong. Hopefully. Hopefully. So Tord is another one we're seeing more with autonomous vehicles there are these questions about what happens if the autonomous vehicle decides to hit my car instead of run over the baby who's liable in this situation and what it gets back to is this idea of an accountability gap so basically like taking the the analogous situation for if a person was there and then figuring out where the liability would have been apportioned if you know the same thing happened so if instead of you know this was being driven by a person instead of an automated vehicle you know the liability wouldn't necessarily go to the person except if these five things happen and then you can point to those five things and kind of have a little bit more of a protection there. Indeed. Good enough for that. We have so many slides, let's keep moving. So we're going to get to the fun part that was all kind of like background so that we could set up the things that are the most juicy. So the use cases and the research history so I'll let you talk about Corpbot. Oh yes, okay so I promised you there was history. Here is some history. So anyone here heard of the firm Robot, Robot & Hwang? It's kind of a joke but it's also kind of real so Tim Hwang is a very creative guy. He used to hang around here at MIT and Harvard and he went to get his law degree at Bolt Hall at UC Berkeley and he's got this concept of how much of a law firm can you automate and he's really good with creating autonomous entities so in 2011 we collaborated on a project called Corpbot and we just wanted to create some code that would go to a secretary of state's office and form a corporation and that would conduct a single business function like sell a book on Amazon, upload a book to Amazon create an account, sell it get some money and then like dissolve the corporation. So we made some progress I'd say but then we all kind of went and did some other projects and we never really completed that one so it was much harder to do that type of robotic process automation with more nuanced legal and business requirements much harder than we thought but we've been working, at least I've been working on this since 2010 I'd say and so if we fast forward a little bit in 2016 thanks to Blockchain we were able to make some more progress and so one of our collaborators at law.mit.edu and then we were both partly with the digital currency initiative for this project she wanted to do what she was calling a blockchain border bank basically like a community bank on the border of Haiti and the Dominican Republic to make it easier to get micro loans and so we did what we could to model that turns out that was really hard especially with the banking law and everything so what we ended up doing was a revolving loan fund operating under Massachusetts law or at least I was licensed to practice and we understood what the forms were and we could model it more and we could test it all the way through without going to Dominican Republic jail or something and so here's the this is basically the UML that we came up with in order to figure out how to do the loan application in an automated way figure out based on some criteria who would issue the loans to and make sure we had the balance on the fund and then receive payments and then give them a receipt and check it on the blockchain for every payment that we could show and then to finally provide the acknowledgement that the loan was paid off which is a big legal document under Massachusetts law that you want to be able to show and we modeled that pretty well but again it was a little hard to do the test all the way through the best way we could figure out how to do it without putting millions of dollars into creating financial institutions was to use PayPal send and receive money and at that point we're like okay we figured out how to integrate our code with the PayPal API but give me a break is that even a realistic test with the PayPal fees and everything so we needed to look further but we made a lot more progress on modeling the entire entity and let's go forward ah okay now we come closer to the present even this is a little outdated now but you want to talk to this one? yeah so this is the fun stuff so you've been working together on this project like it's related to automated and autonomous legal entities for a while now and we co-hosted a workshop as it was remotely here and I was in Berlin with a bunch of the people at Fullnode and one of the things that we wanted to walk through was this kind of it's pretty basic schematic for what all of the actions would be required in order to create a publishing now so if you got a network of people together and you wanted to produce a book or something or produce different books or start hiring people to write for you like what would that look like and so what we came up with was okay so there's a publishing dow the publishing dow investment in order to buy this expressive book machine which is basically a printing press for books and then you kind of create this smart contract marketplace that allows you to pay logistics partners to pick up the books it delivers them to the people in the public the public can deposit money to receive books the deposits go towards a publishing proposal that's either confirmed or denied and then the the book itself is printed and so one of the things that we wanted to see here was okay so legal rights and obligations existed all of these different steps and one of the things that we kind of came up with and one of the insights that we've been really trying to drive home here is that you know there's a really strong need to narrowly scope exactly what a dow is doing from a legal standpoint so that you don't run into any of the contractual issues, the agency issues those issues of uncertainty where people might be out of money because one of the things that I glossed over before and should have mentioned is if you don't have one of these legal containers the United States and all of these state governments they'll assume you're a general partnership which means they can go directly after you for whatever liabilities that the organization occurs so it's really important just to identify the you that's like all you all so every member is jointly and severally liable and what that means is like if you know like member one has like a extra toyota that can be like impounded and member two has a vacation house and you know $20,000 and there's savings account, member three has whatever you know like a painting they can go after everybody until they've paid off the debt so a general partnership and like is like ultimate liability exposure and if you're going to have a legal entity you don't want later someone to say oh your DAO is a general partnership it's better to get ahead of it to use some of our open source code and to develop it so that you can select the entity and then engineer the legal relationships and roles according to the business model that you have in mind yeah and that's especially the case if you have member four who lives in a trash can screws everything up and does something wrong they get in trouble then you know you lose the vacation home and all the good all good stuff notice this one by the way on the last one so this is an interesting hybrid where the DAO we played it different ways where the DAO was a legal entity itself and where the individuals where the DAO was more like a tool or a platform and the individuals maybe had a different corporation but there's people very much here so I'd call this an automated and significantly like I know some level of autonomous in this but there's actually humans doing the votes like do we like this book do we not like that book do we want to get in this market we want to push this we want to put more marketing behind this one or not and sort of choosing the distribution of their resources against selecting and then pushing the new materials and who they want to work with so this is kind of a hybrid approach on the distribution at one end there's a completely automated entity and you could create partly automated entities to go and form a new entity then you could dissolve the partly automated entities there's different ways you could imagine getting to a completely autonomous entity that was nonetheless validly legal entity that's the far end of the scale most of our work here I'd call more practical where there's hybrid between existing businesses existing business models human beings very much in the loop or actually in the driver's seat but then disappearing a lot of the complexity is much more responsive to the strategic and tactical decisions you make because it's all encapsulated within a single unified like integrated legal entity so the you know you imagine the bookkeeping the all the financials but also like the inventory and like strategy and operations HR when you encapsulate all that you can make we believe you can make decisions and adapt at more the closer the speed of thought and that you can manage and be much more flexible would be a much better form of business yeah and to that end one of the things that we're also doing right now is we're launching a new publication which is going to come out Friday the MIT computational law report of which I am the editor in chief and as is the executive producer and the whole goal of the publication is it's a little bit different than other publications one it's focused on law which is a new thing for MIT we're looking at ways that you can reimagine and re-engineer the law so that it functions more like a computational system so we have a lot of interest in learning what is bridging that gap look like but we also want to because it's not too because these aren't two disciplines that have traditionally been connected with one another we want to do some field building so we want to have conversations about how these processes take place we want to convene people together and you know see what the good ideas are and then we also want to produce content and that content comes in a few different forms and this is where we're really excited about what we can do because the content's going to be traditional written articles but it's also going to be rich media so podcast video lectures about how to code something so that it can produce some of these things but it's also even going to have a data playground where you can upload a prototype of an app people can evaluate it comment on it deploy it themselves you know iterate it and the goal is to come up with better solutions that are accomplishing some of these goals that we've been talking about so this is what we call at MIT pre-competitive research so this field as Brian said field building doesn't exist yet and the people that we're working with the companies law firms governments and others maybe some of you perhaps are interested to find solutions and to find design patterns that work evaluate them and then the next step would be you know you could choose if you want to invest in a startup or you know put something out there in the market so this is and one of the things you meant you didn't mention that I'll highlight in the data playground is reproducibility so it's hard to what we really want with engineering the law as a computational system is predictable legal results so you don't want always to be talking to lawyers and have them say well it depends well upon what exactly does it depend can we know that up front can we engineer a system to achieve predict more at least predictable legal results the answer is yes we can and that's what we're trying to do and we think actually using the scientific method and tried and true almost like cultural DNA of reproducibility at MIT for some of these experiments to see if we can get the same business legal and technical results against some test hypotheses and other test regimes we think that's important and that that's how we structured the data playground yeah and well and I think one of the other things that would be especially pertinent to this group here is we're going to have a podcast that's going to come out on Friday that's about the idea of legal primitives so borrowing from the idea of cryptographic primitives what are some legal primitives that we can come up with that we can really fine tune and allow people to kind of like containerize and take away with them so that they know exactly what they're getting in all these different circumstances legal primitives that you could be thinking cave men or barbarians think more like building blocks that are fundamental building blocks that you can compose together to create something so cryptographic primitives are like digital signature encryption aspects of dual key cryptography these well-worn primitives that are reusable so we're looking to identify some of the legal primitives notice maybe the previous speaker spoke about identity a contract well digital signature there's some that may have good overlap with cryptography in fact but there's some others that are unique to law yeah and so getting through some of the last of these oh that's actually the Berlin working group at the top that we did but yeah we said to kind of like accomplish some of these things we've been hosting these these workshops where you know we're getting down here is one of the the guys who came up with the bbllc statue in Vermont so this is a drill down on the door and like a like a total demo this is like a drill down that went for almost an hour and a half on agency law just walking into dows to see you know map all the roles relationships rights and responsibilities of the parties and play them against scenarios this one was I think that one's probably contracts yeah that was the contract this was the publishing dow and there's a few more we kind of ran out of slide space but we do a lot of convening as an input to the design and prototype of systems one of the things that we're really excited about with this first release is we actually have a challenge so if if anyone wants to contribute to this challenge we would welcome it but the idea is that we want to kind of build up this repository of people who are working to produce code that automates certain of these functions and so you know if you have if you're working on like some small piece of it maybe like you know you want to understand how to integrate like a voting mechanism with one of these BBLLCs or if you want to go the other direction and figure out how you can just like automate something in a way that produces certificate tokens you know this would be a place where we would very much welcome like that sort of stuff and if there's any interest in staying kind of up with these things we have a computational law telegram channel where you can get involved and kind of spit around feedback and ideas and you know start populating the space together with us I believe that probably the best thing to do is to go to law.mit.edu click on contact or forward slash contact join the email list and could have a more even more curated you know kind of updates of when we're doing things in communication the telegram channel is great like I live there but it can be a little chaotic for those of you that aren't used to like dense chatter on telegram. The other I feel like we should say something else about this this okay so this challenge also is part of the release the first release of the publication which is our soft launch is Friday of this week and the theme of the first release is automated and autonomous legal entities so several of the articles are on that some of the projects are on that several of the podcasters on that as well as other more foundational computational law themes Sandy Pentland's got the anchor article where he sets the big vision on what is computational law and that's amazing and one of the things that I know that we want to work on with the conference organizer is actually modeling the legal entity aspect of like a robot arm that creates art so we think that this is a very it's sort of adjacent to a robotic and publishing company but it's not different in kind in some ways it's a lot easier because the housing of the robot arm actually has a place where we understand how we can work on code you know what the robot will do we think we do and so we can start to actually engineer against certain scenarios and hypotheses like what if the artist owns the art the robot arm is doing something or what if the consortium that has purchased the robot arm are considered the owner what if the robot incorporates itself and is considered the owner on and on so there's always sort of permutations on scenarios and when you have like you don't you can't understand law or legal outcomes in the abstract law can only be understood when applied to facts that's why lawyers say it depends on the facts yet so we think that this will be a great platform to basically engineer all of the relevant facts and then play it against different scenarios to see whether we're getting the expected results for the legal roles, relationships rights and responsibilities and fundamentally the legal outcomes that we're seeking to engineer so that's we hope that that will be one of the challenge results that we can hack together on and if you have interesting ideas some well intersection of robots, AI and law with respect to legal entities or more generally we would love to hear about them right now we have some time for some open discussion thank you any questions I just want to ask you thoughts around you know checks and balances when it's come to information coming into the lab I mean lately having quite curious and also interested in AI bias data with AI so how do you like what's your thoughts around you know sort of filter right information and also checks and balances of information deep into the system so in other words if you put garbage in you might get garbage out so how do you do the checks and balances on your proposals can we go backwards on the slides a little bit I'll do that while you're talking so let me see if I've got this right the basic question is like if you're set up so that you know there's some stream of data that you're trying to that you're ingesting as a decision making function in the internal governance of the DAO like what happens if you know that data gets corrupted or something like that and you know it starts producing all of these like terrible outcomes and to answer that I would say you know you can start to there are certain things that you can do that would be modeled kind of after like high frequency trading algorithms you know so if there are certain amount of calls one direction or another that signals like something super volatile you could have it set up so that it kind of just meters off or requires like somebody to look at it or the group to get together and to reach some sort of consensus before it can proceed forward so it kind of like you kind of have to create like a legal pause button on like what you're doing to ensure that you're not like going the wrong direction so that's one thing that comes to mind there. And then going further some of this comes down to just good old fashion information security and so even on a high frequency trading platform if somebody hijacks it and gives it market mark so that it starts buying other things of course that's probably crime and fraud but that is one way you can get corrupted information or garbage in to manipulate activity like through a direct tax information security doesn't go away it's even more important with automated and especially autonomous systems to make sure that it's getting the inputs that are expected from the oracles or the other sources but then you also come down to then you also have to be thinking beyond like a direct attack whether the sources you've chosen are really appropriate so I think you've mentioned the word bias so that's a big question that I think so for example if you cut in this system for evolving loan fund the you can't really see the swim lanes on this too well but imagine there are swim lanes it didn't come through our JPEG but there are decision points where all of the information for loan applications presented to a board and then they make a decision so the way this system was created is people log in and authenticate themselves and they have authorization to be like N of M approvers to issue a loan or to change the distribution like oh we're going to be doing a little bit more high risk loans and more microloans where that'll be the distribution so this sort of depends on two things making sure that the authorized people are logging in to set the parameters and approval chains and sort of workflow points but number two are you gathering the right information on the loan application or on your from like other information that we assume we'd be getting from Bloomberg and other places just to look at what the distribution of the fund would be and this is you know basic business judgment and it's one of the things Sandy Pentland says in his what is computational law article that we're releasing on Friday is the critical importance with the legal dimension of these systems of modeling them and then not forgetting about them assuming that all of your decisions initially were absolutely correct but instead monitoring and then adapting them so if we turn to some of the information is biased and you need other information you have to change the balance of how you're calculating the relevance or weight of different information that's coming in in order to hone the model to make better decisions so there's less bias that you don't want then this is a this needs to be built into the design of the system so Sandy very much advocates the computational law systems everything from creating a statute to you know managing your contracts or other businesses business types of instruments that most of the action shouldn't be on the initial design phase but it should be on the design of continuous adaptation and in the information that might be perfectly good in 2020 may end up being biased and not particularly reflective of the key inputs in 2021 or 2022 the years 2022 and so you have to continuously hone and identify where the bias or the other inefficiencies are as you go with computational law systems I suppose with any system but we think this needs to be part of the DNA of computational law those are some thoughts on what you said I think what you said raises a lot more questions that we haven't got to and that maybe we can't conceive of today hey Adrienne so one of the primitives maybe not in a sense you meant it is reputation narrowly reputation issues sort of cross over all of the decentralized AI stuff that we heard about earlier today in all the domains where does computational law impact reputation or vice versa in other words is there a narrow subset of projects that are already underway or aspects of the discipline that can be used that can be applied as a primitive to the reputation components I think there are examples out there now like Estonia's got the e-birth certificate Zoog's got the land registry that's on Ethereum and I think these different groups are starting to plot some points down on what the factors are of identity that you need to have in order to properly indicate or authenticate what your reputation is and that you're able to do something and so I think those are some places to start and then as more and more entities not entities but governments and different players start to do this that will become a little bit more clear like you'll start to identify more of the general trends and be able to say okay we've seen of all these places here the five most common features that you should look for and go from there I think that's all good practice and then if we go even a little bit deeper into the question of is there something in there that might be illegal primitive so I'd say the first one would be something in the zone of identity itself like there's a creature like a human being or a corporation that has legal personality so we'll release on Friday this our podcast with Drew Hinkus just starting to identify what we think legal primitives may or may not be we weren't sure by the end of the hour whether identity would or wouldn't be a legal primitive there's different ways to look at it let's just hypothesize if we considered it a legal primitive there was consensus around that people created reusable building blocks maybe something like the outcome of N-Stick or something at the kernel of an UMA identity or something like user-managed access identity then you could imagine constructing that primitive that concept of a primitive such that the identity has attributes that may be part of the definition of the primitive and some of those attributes may be authorization some may be other identifiers and some in fact may be things that adhere to it like reputation so you could imagine if identity were primitive and it were a basket of identity attributes some of them could you could have like a agnostic sort of like genericized thing that we call reputation attributes so at that level I guess there could be reputation that was like a legal primitive but honestly there's not even consensus among the few people talking about legal primitives about how this would play out with identity at all at this point or whether identity is appropriate for a legal primitive we're just really not sure at this point so I would encourage I don't want to be that speaker that puts the question that says a question with a question but I would love you to think about that Adrian and talk to people about it and then talk to us about whether you think identity would be appropriate legal primitive and if so what the role of reputation or things that are sourcing from a third party adhering to the identity might be oh that was fast a little tiny bit the link between identity and reputation is a context and what's missing because we really don't have any technology or science around reputation worth anything much these days what's missing is introducing not worrying about digital identity and identity as a legal construct but rather introducing the principles that I think law can bring into defining the context in other words the adjudication of reputation is or the gaming of reputation or how do you control the gaming of reputation don't bother about the stuff at the low levels that we do in the self sovereign identity groups that's way too low level and in UMA as well but rather this issue of defining context in the legal sense in the adjudication or how do we appeal etc thank you that's helpful sir did you switch seats to be in mic position okay just two questions a little bit futuristic right now we are facing with the situation when the supply chain and some processes is really long with the auto autonomous system and fully automated processes sometimes it's hard to define in some cases something happened something going wrong it's hard to define who is who will be in charge to pay for that and in some juridic such situations really exist when the many participants in the process for example of death of the person and nobody can be blamed because there is a really long chain there is a movie about that but will we see something like insurance funds for autonomous systems and robots and AIs to ensure that in any case of damages from the site of such systems all damages will be compensated I can start us off on that so the way you posed it I thought you posed the question really well but there is one word I might suggest we amend it's hard to know what happened and who is in charge but to get right to the real point who is accountable or responsible who is going to be left holding the bag if something goes wrong so to look at that dimension of it what we want to avoid is an accountability gap okay and so some people in the early days of the DAO especially were specifically attempting to leave an accountability gap where the idea is something is going to happen and you can't touch us like we're not part of any jurisdiction and I think it's very questionable whether that's a beneficial or sustainable or desirable system at all but as we look forward from more the law.mit.edu perspective we're looking at systems that operate well based on our social expectations and that are extrapolate forward which includes accountability and so to me when there are human beings and other corporations utilizing automated or autonomous systems as tools it's not a big change in terms of what's accountable what you need is attribution at that point so to whom do you attribute the act so as long as that's clear then everything else kind of falls the same way without an automated system or a manual system but now where it gets interesting I think closer to your question assumption is what happens when the system is kind of taking actions and causing consequences without human review or approval or even knowledge so now we're in the fun zone so in my mind I believe that it is not just possible but essential if or when more likely these systems start coming online the major part of the equation like required is that there be financial and other mechanisms to ensure there is no accountability gap and so if one must if all one has is the automated or autonomous system to hold accountable then therefore we must look at things like insurance bonds reserve funds and things that are proportional to the harm that may be required for the type of thing it's doing so if it's selling books that may be relatively low if it's doing munitions and nuclear weapons distribution it may be quite high and everything in between and so looking at the potential exposure of different business activities is a bit of a magical art more than a science but there's risk managers that can begin to size up the appropriate risk management kind of a premium? well a premium but what would be appropriate risk management capabilities to have for certain situations like is insurance appropriate and if so what kind of product and what would the premium be is do I need a bond do I need like a liquid reserve fund or other things like that or is there a common defense fund in different ways to start to build in accountability but I'd say that it becomes essential and it ought to be built into the process of having fully autonomous systems that are capable of causing harm and so I guess my answer to your question like is this something that could be thought of I'd say like hell yeah in fact I think it must be it must be thought of and it should really be part of the core design I think it's related with the first one will we see something like open source license for AI and robotics but not the source code but to open itself I mean what Eduardo said if the robot can buy itself if it's possible in the future there will be a license like this what would the license do like for example there is in the open source some license you are putting that I'm not the owner of this code no more I'm open it to society and I'm not take the burden of the damages or anything but is it possible the same thing for robots and AI for example yeah exactly so I think there's a couple of concepts there one of them is the concept of emancipation the open source is sort of close but let's get really point blank on the target you could one could imagine one could structure like legal documents and business models and social arrangements where we deliberately intend for some code to be emancipated so it was owned at some point and at a certain point it sort of owns itself or it is independent it becomes autonomous or would say emancipated so like a young person can't form a contract when they're 12 years old by the time they're 30 years old they can one of the things that happens there is basically legally it's emancipation a slave similarly cannot own property in fact they were considered property when the slave is freed they are emancipated so an emancipation type of event is one way we can see this happening another thing I would call is something I sometimes refer to as the broken leash and so like you've got this dog or this thing and it's on a leash and then the dog kind of bit through or otherwise just like ran off and like the leash is out of your hands or it's been broken so now we've got this rogue AI going around that for all intents and purposes or maybe the leash is relinquished because the only person that created and owned it and operated at what is now dead or they went to jail or they don't feel like doing that anymore or what have you and so you can imagine conditions that would result in that I think the interesting question is in fact I'll go one step further in 2019 I would say I envision that this is inevitable that we will see these things develop in the next handful of years you know up to I'm not going to put a number but in the future in your lifetime and so then the question becomes okay how could an emancipated AI or robotic or purely software be a kind of wholesome healthy you know desirable legitimate creature on the terrain with us and so this starts to create questions about what types of requirements or constraints might be appropriate for that and this is a question that's I think it's just about time to have realistic conversations about it it's still premature but it's not too premature to start thinking and talking about it and so I think that's what you asked yeah and I think too it gets back to like you know a few years ago there was that like who owns the intellectual property rights for the monkey selfie where the animal took the the selfie of itself it's like who owns that and you know one of the things that you can look to in order to determine that ownership is like does a legal personality container exist for that entity so whether it's an animal or a personality rights you know I could imagine you know if there was some sort of registration process there was some sort of you know indicating of like what those voting mechanisms were the decision-making calculus that went into it you know you could have a legal personality container for robots you know what that actually looks like remains to be seen but I think we're getting incrementally closer and closer to understanding what the contours of it look like in the inner working and so one component an inner working that would show up on the contour where you could connect with it I think one thing would be something like a license plate you know even if it's virtual so that you could say ah this AI or autonomous entity belongs to you know ACME Corporation or belongs to Sandy Pentland you know it's a personal shopping bot thing that AI when I look at the license plate the license plate's visible to others is emancipated good to know well then maybe before I conduct a deal with it I should then check does it have the standard insurance and bonding or does it not is it fully paid up am I doing something within the scope of its capabilities is there like a robot.txt file I could query at a standard API to find out more things about including it owning itself or being emancipated what its capabilities are and what my recourse and remedies would be if it all goes terribly wrong but I think what we really want to keep our eyes on is it all going beautifully wonderfully right so like some of these types of entities can be extraordinary for the innovation and the economic prosperity and the social issues that they can help us to resolve and help us to achieve some of these deeper goals and so what we really need to be doing now is fundamental engineering and sort of pre-competitive research and development on designing the types of containers so that we can make we can get the best out of these capabilities while also maintaining reasonable risk kind of management and also maintaining our values intact and I think that pretty much brings us to the end of the session yes so do you have a final question Fabio take mine from my side the question is does already exist a framework which allows could allow automatic litigation because I think to see a situation like that you have an intelligent trading algorithm which has a beautiful idea of trades but this happens not to be legal and so another argument is to detect a wrong move and open a litigation so say this I don't want to pay you because I mean in certain context for example an autonomous car not wishing to pay a parking lot or in trading speed so real time litigation could be automated litigation might be an option but the question is this legal so we have a framework we have a framework for that so legally it could be implemented and now to meet the litigation on a trading floor or on a parking lot thank you last question so you could set up a framework for that so a lot of times when you enter into agreements with banks or other parties there are arbitration you could also imagine an online dispute resolution process like what eBay has, what Amazon has and those are a lot more efficient than courts are and so if you had something like that set up where when you're setting up one of these where you're setting up a DAO you kind of have a checkbox for this DAO prefers this sort of online dispute resolution but it will do any of the following online dispute resolutions you could have a situation where something happens and there's a goal to quickly expedite all of these legal processes and it can automatically run through one indeed and so just to play it out quickly so let's take the parking lot that's a good one so you have an autonomous vehicle that's going around doing deliveries from Grubhub or something it's got an hour between things and it's more efficient for it to park than for it to circle the block or two hours so it shows up at a parking garage it has a RFID chip or something so it can be identified and enter and knows where payment would go one of the things you could structure so on those components and building blocks if I were a parking garage owner I might be part of a consortium that developed a standard that would ask can I pre-approve your credit card for the amount of time that you'll be staying here in advance and then if I did that but for some reason it didn't clear when it was time for the car to go I could have an agreement that it was capable of entering when it came into the garage that I can maintain possession of your vehicle until I get payment or something else and that's where we get into questions like recourse like okay so the credit card was pre-approved when I went to do the sale it didn't go through because you reach your limit or is a charge back now if you can check up front as part of a data exchange interchange that it has a certain insurance it has a certain reserve fund at least you know you have recourse overall so you can let the car go so I think these are some of the types of design design patterns that we would need to look to fill the gap between where we're at now with the components we have which are close and where we'd want to be to have things operate in more of a fully autonomous way does that make sense but it largely is built upon it just uses the existing systems and frameworks but we now need to sculpt more APIs and add a little bit more to the transaction codes than the business models in order to build out full use of the capability and so with that I think the full use of our capability is now expired but like first of all I think we should thank Brian and Dasa for this amazing last session so thank you guys