 Anyway, I want to tweet it for that. It's the top link. It's the top link. And we're back. Welcome to the day two start of MIT MediaLabs' new computational law course. And we'll be exploring computational contracts today from a, I'd say, like a systemic perspective, referencing a use case in the energy systems domain. But first, our collaborator, Brian, you're listening from Thompson Reuters' lab is doing a quick download, a tool that we might want to be using, that we certainly want to know about for this. And let's jump right into that. So, Brian, you want to say hi? Oh, there he is. All right, so I'm going to go right to screen share. And see if I can catch up. And many of us here in the room and, I think, increasingly online are doing this on our phones. Presents to everyone. Here we go. OK, so the first thing we do is we go to block1, B-L-O-C-K-O-N-E dot ThompsonReuters dot com. With no P, it's not Thompson, no, no. ThompsonReuters dot com. And then we go on the right in the pretty orange to block1 ID and click View More. And then we click Launch Demo. And then we click, then what do we do? Well, there we post the color. Yeah, so pick a color. You don't have to. Oh, sorry. There we go, right? Right. And that's what we're going to post. Tram phone. This will just trigger the wall of creation. OK, I have to say that is a most delightful queue of orange. We like it. We slide it on anything. That tells me, like, soon if I can understand at least a lot through the lens of key sites, you can find that, which is good. OK, it's loading. And so what is loading now? This stronghold app, which is those wallets. All right, and so all right. We've got a variety of logins. I think I will choose my Google one. So now here we have a word of survey. So I now have an externally issued credential on Google that's logged me in. And now what am I seeing? And what are we doing? So choose the wallets. So that's going to set up your wallets. OK, all right. This is a feature that's thrown away, I guess. All right, I agree with the term. And can you give us a rundown of the terms and conditions? Just kidding. Yeah, I don't think you password strongholds. Oh, God. All right, fine. Come on. I know, I know. You did that for the security. Clearly, yeah, I just want to let you know this is appropriate level of security for security. All right, now are we happy? Is it still not happy? It's still not happy. For now, sending Google would be fine Google isn't working. Yeah. Google is going to resort. It might be, it might be that it's my doing this on my phone. Yeah. It's my phone and it's where I do it. I think it's going to work. I think it's going to work on your phone. I think it's a Google Google. Yeah. So see, you did Google in the last couple of months. I think it's going to work on your phone. Here's what I think. Yeah, I'm talking. You didn't answer it. Right. So that is an artifact on your phone. Yeah, I think that is an artifact on your phone. So you need to save all of your words and order. Save them. OK, so this is interesting, actually. So we'll want to speak to this, or maybe we'll come back to this. But this is critical for if Christian Smith was here or some of the other people. If this is a class on identity more than contracts, we'd be all about this. So I'm going to call this Factors of Authentication for basically like credential, like reaccess or rekey. So I lost my stuff out in the town on the battlefield. And now I've got to prove I need to get a rekey or order all copies of my private key would crush. The code book is blazing. What do I do? I don't know if you'll mind me. So this is a very good way to do it. And I've got to call this modern cryptography out in commerce and among cryptomines. But they have this, and there's a whole bunch of different ways to do it, but they generate these sets of words, which I'm told are very, very high grade of authentication. It's very hard to guess what the sequence of words are, although the words are human readable. So like the words appear in a dictionary, but a dictionary attack is very unlikely to achieve the set of words. So some people are now starting to experiment with poetry and things with meter and rhyme to make it easier for the person to be able to remember it if they're not trained. You know, demonically to do that, as many are. If you're under stress, you might not be able to do it. And so this is very key. However, I'm not going to write these down. What? I should just copy and paste them somewhere. OK. All the words, if there are any words, authentication, and you get to a certain point where it's going to become much, much more difficult to factor than an ambulance is trying to do. Sorry. What's the smallest number of s? It was like 2 square prime. Yeah, what is it? It's 4 square prime. Or is that what you said? Most of the s is what I said. Yeah, it's just 2 to 12. Sorry. You're the crypto. I don't know. All right. Here we go. Next on a pretty attractive palette of cards. OK. And now we do one. How's your memory? Pretty good. I think it was that. No, but it has the numbers in it. I just have to do one word? Yeah. OK. Or it's a pre-venture one if you recover the words. Oh, you have to make sure you write this down. You're watching this? So this is interesting. So actually, we're getting a little bit of nice authentication to sort of at least be on top of where it's going. You have a pretty good team in England that went through this and came up with this. I recall. Yeah. A good team. OK, so now what are we doing? Now, what are we seeing here? What is this mean? Are we getting into cryptocurrency now, Brian? Yes, I believe you are, sir. Oh, my goodness. Let's check it out. So ETH, can I see ETH? OK. Well, this is an ETH, right? ETH. So this is a tiny, tiny, tiny, tiny, like, shaving of ether. Why do we need that? In order to process a transaction, we need some gas, is what they call it. OK, so if I click Go, I don't have sufficient funds. Yeah, that's OK. So open your vault. OK, open my vault. OK, I mean, oh, good. I feel secure. OK, so this would give you $1,000 a year, 12 words. OK, now what you should do is under the, there's a, up here, it'll say it says RAFE network. I would go to the Thompson Reuters, Morris Board Network. That's a tech test. Testnet? Yeah. Testnet is the lingo within Bitcoin, this area of another blockchain, basically, technologies for where you do everything, but we're not actually charging money and it's not production yet. But you can go a long way and test that's when they're designed well. OK, so now go and click on the three dots. OK. OK, so again, ether. Get ether. So now we're getting some of the so-called currency or crypto points that we use to power transactions on this network. This network is for identity, but it's still transactional on the network. No way. And say, get ether from faucet. Why do you call it a faucet? Like jump three. Cool, we can keep reading it. Did I do it? Yeah. OK, do I close? Yeah. OK. I've got one. OK, I'm a lucky winner. Thanks, Brian. Thank you, Thompson Reuters. Now what do I do? I go back to my place and do my thing. No, I suppose you could try to transfer money to one another. What? I wanted to. OK, so let's say we want to transfer. Who's going to transfer? Who's ready to receive money? OK, all right. So how do we? Can you talk us through how do we do this transaction? That's a great question. Sorry, Brian. Thanks. You're a good support. Hey, you know we're all here. So what are the three dots again? OK, this is why he's in charge of the lab. Like on the fly, he remembers this stuff. OK. Transfer either? Yep. I know this is not what. OK, so then get something to smoke it up. So you have to need to add another account here. So the payee and the account. OK, so now we need to know your address, I think, which is going to be what, like a hexadecimal string problem. Whatever shows up, it's shown as the user word. That's right. Yeah, so in your wallet here, it'll be whatever this thing is here. So I think, hey, we would get it from Wallace. Whoa, whoa, whoa. Look at this, Brian. What does this look like? This looks like an identicon. So let's check out yours and see if you have a slightly different block. This may be a uniquely, you know, I think this is an identicon. I think this is one of the hacks that Brian came up with for province that we can stamp on things. OK. It's all coming together. So let's see. Brian, Jason, what do you need to do? We need to find an identicon. More transformable. Here's just way better. I'll own back. So Brian, check this out. Sorry, this is proper identicon. Except for it's been on the subset of the blocks, right? I guess they weren't expecting much money. Not at work. Like, this is exactly the technology we want to play with. We can stamp on things like, I don't know, that record of entry. You're showing a type of shift of carriage, or something authorized. So let's do whatever. I think we can do that. I think it can be computationally, proofably, in a real-time authenticated so we can verify that things are going correctly according to the law. OK, what do we do now, Brian? So we need to get this address. OK. What is your address, sir? Whatever would it be on the screen? So you're probably wondering out there, and interestingly, what on earth is going on here right now? Let me bring you in. So what you're going to do on that is we're attempting to do a transfer of either from one account to another on block one. Using the Trumption Reuters, I can type it in. You could, since that's just the address, I don't know if you can do anything to it. It's like your home address. You could just type it into the telephone. You can type it in. You can write it in the board. You could come over here and type it in. Come over here, so you can just type it in. Yeah, why don't you just read it to me? Can you scan the QR? I'll type it in. Yeah, I figured it would get a lot of strength. I hate to ask this, but can you just read it to me? So let's type it. Thanks. And I type it here. OK, I'm ready. OK. And I'll kind of see if they can transfer with a minute to grab it. 0, small, low-case x, 3, low-case k, 4, 0, 6, 8, B. The draw will take time. That's good. High end, 3, 8, 6, 3, 2, 3. 1, 0, 6, B, F, 6, C, 6, 0, 4, 2, D, 1, 2, 5, E, B, 5, 5, 3. I want to read back. OK, so how long will we see in the movie, someone? Between Chris's Hotels and the Hamptons. 0, x, 3, 8, 0, 6, 8, B, 5, E, 3, 8, 6, 3, 8, 3, 1, 0, 6, D, F, 6, C, 6, 0. I want to write it out of space. How many? 4, 2, D, 1, 2, 5, E, D, 5, 5, 5, 8. OK, launch sequence verified. Now what do we do? OK. I feel I should give him a little bit more because I made him come all the way over here. I'm going to get boosted up a little bit at your bonus. OK, now what? I put Matthew transfer all. OK. Oh, good call. I see the boxes they want to click on. I don't know why. So that's just the speed. So you do need to transfer something. How about you? Right now. Is it clickable or not? Timmy? Yes. Yes. You can say I'll do it as soon as it starts. Could you repeat the next instruction? Is there a way to change the transfer amount? Oh, yes. Oh, here? OK. Yeah, so you don't want to transfer more than one. Can you do like 0.0? Oh, duh. OK, 0.31, a little more than three. OK. OK. Wait, actually. Oh, and then there's a little point. You guys keep on time. Yeah. OK. You've got to pay your minors. OK. Now do I hit next? Yeah. Are you ready for this? Yeah, this happens. Now what? I'm doing it. Invalid address. Wait, so do you have to confirm your address or validate it on the network in some way? Is it an email or is it a thing? No, definitely not. Yeah. I mean, the names of this is so big. I'm sure you got it right. We confirm it. Should we reconfirm it? Yeah, could you copy and email it? Yeah. I know that. That might be the next one. Or what? It's a good question, man. Did the transfer work to the woman at Microsoft? Yeah, I'm working on that. Oh, you are, too? OK. I'm just kidding. It's executing right now. On Telegram? No. Well, I copied her address from Telegram. OK, good. So through Telegram. Yeah. This is very good. Could you share some of the steps I set process all of the public to do? Could you post it with DAS at civics.com? I welcome. Oh, we can just tell you to share. Thank you. OK. I'll grab it over here. Is it? Yeah. I think that transferred it to me. OK. It's very good. I'll look at it. How long will it take for it to fly out? A year. OK. Yeah. OK. I'll look at it. OK. I'll look at it. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. OK. I'm sure you said she may or may not have said it back to me. OK. Did the juice go through? Did the juice go through? I think so. It apparently did. OK. Let us know if she received it. I guess not. All right. Thank you. Awesome. I guess. OK. Yeah. Brons seems to be charging. All right. So I do think we'll just check it out. OK. I can see. Whoa. Done. You're doing the wrong pose. Yeah. I can see. This is our, this is our share notes of the class. These are just people. OK. I'm hearing this. Here. I'll put the address in. OK. OK. Now go over here. Go get the address. OK. You're watching, right? Yeah. right? So nothing can possibly go wrong. Now I go over here, and I go, oh no, I go over here, and I go what? Cancel? It seems to be my only play. Now I do transfer, now I do plus other count, plus other count, and now I go haste, but no. Well, I'm in the garden, did you see it? Yeah, so what's that? Now I go, did you get it? Yeah, I did. 0.23, and now I do nest. Okay, perfect. We took advantage of the time to learn how to do a block one Ethernet address and We're doing a second try. Processing. Processing. Okay. Things are going to get a lot better when you fit your application thing in. Do you have your application stuff done? Yeah, I was just going to talk out there. That'll be fine. TMA is doing a quick video, which is like saying hi to your class and to the admissions committee, so they need to know you better. And then my thought is, it's up to you of course. But my thought is that what we should all do is at the end of our video, which is they go, hey, can't they? So the kids are the thing. And they can say like, the GPP credit for it being one of the TMAs in the class of the Media Lab is no to me the coolest part of MIT. So that's where I think. I agree. Okay, agreed. There'll be two of us talking at least. So I'm going to say that I'm going to do the video outside so it's more quiet and I can be walking and interactive because I was doing here yesterday. TMA! Awesome. Okay, great. So Preplus, when you're starting to do it so we know you do it? And we do it to it. And then go out there and then does that work? Yeah, it works. Maybe just do a bang bang on the door so that we can... Or you can send us a message. No, just do a bang bang on the door. All right, go do it. All right. Is this a normal TMA? Real career. She's one of the T's in the class. No. Is this normal, Brian? Okay. Brian, listen, is this what happened with you? Is it just like the endless... Yeah, that's it. So I can see from Amanda's that my little identity con shows that it's sent at 10, 51, and 35 seconds. Did you receive it? And I actually got two transactions. The initial one, I actually got something. Oh! Yeah, although it shows failed. It shows it failed? No, no, yeah. It showed it failed. It did. That's what we tried to do. I got two transactions. Did you click outside of the window? It goes away. Oh. Okay. Do I still have one? Do I still have one? What if I hit refresh? I should have pointed it. Anyway, so I think what we've shown here is that how to create it... Actually, let's get back to regular schedule programming. What we've shown is how to create a wallet on the Ethereum network through Thomson Reuters Block 1 application. And we actually conducted how many transactions? One between us. Two with Amanda. Two with Amanda. And that's... So we put back in... So three altogether. So three successful transactions. Lickety-split. So good luck on kind of getting, like, set up on a repo. Or, like, the SWIP network to do the internet. So there's a role... There's something quick about this that's extremely audible. One of the things we should show during the break is... We should crack open the Ethereum blockchain and actually show these transactions. And then let's, like, actually, for instance, deconstruct a block or two for a good time's sake. And then, like, look at... And then, like, match the ashes up. Oh, yeah. So let's either stand on IO. Yeah. Yeah. The cat... The cat in here must have been loaded with this. The cat in here is really... Yeah. Did he say that? We don't know about that. So I'm going to have to change the cat's slide again. That looks the best. The cat's... I know. The critters. The critters. Okay, everybody. So that was... I'm going to just say I think that luck is smiling upon our class today, because we were able to achieve that special bonus round of tool acquisition and skill-building and Lickety-split and exactly the container and time needed for Chris to get his notes. Yeah. So we're off to a great start. And now I want to just really welcome you to MIT. I've been collaborating for a bit now on different client things, and especially enjoying geeking out on computational contracts and sharing notes on it. And I'm pretty sure I've been more or less like a pile of baking soda here. You know, you could say metaphorically, chemically, which has been somewhat inert by holding the potential of computational contracts. Chris is vinegar. And so I think we're about to... We have the opportunity to kind of put the right chemicals together and create a catalyst. And so we've been fixing to do this for a long time. We haven't done this as a typical curriculum. This is an innovation class or like a pop-up class. So some of this is because Chris and I have been wanting to get together and geek out on computational contracts since we met, I'd say. And we thought, well, why not do it in the context of a project-oriented roll-up-your-sleeve class with lawyers and technologists. And so with that, I have to say I'm giddy with anticipation to hear kind of like your presentation and how you look at it. And then to have you, when you're going to talk in with the conversation, roll us into what's going to be small groups that work on these cases. So with that, you maybe do a little introduction over yourself and then bring us and then tell us what computational contracts, especially the variety there, automated contract systems. Sounds good. Do I need to switch? No, you're okay. Okay, I'll be a camera person. There we go. Hi, everybody. My name is Chris Barron. I'm a partner in the environment energy group at Trick or Biddle and Reef. We're one of the oldest law firms in the country and a fairly unique one that has an emphasis on high technology. I think we were the first to have a chief data scientist at our law firm. And at the time, a lot of other law firms outsourced the, you know, that hard quantitative stuff that makes lawyers' heads hurt to other folks for e-discovery applications and so on. We were one of the firms that actually, you know, did a bunch of that in-house and developed our own big data analytics, mining capabilities and so on, which is quite interesting to work with. I focus on regulatory and transactional work in the energy and the environmental market space. Market design is the majority of the regulatory work I do, mainly in the electricity markets, but also a ton in the environmental markets, carbon markets, renewable energy certificate markets. Markets that, you know, as Daz and I have talked of are certificate of origin markets, essentially, attribute tracking markets. I started my career back when I was a munchkin working with the green groups to do advocacy on Capitol Hill around things like energy and climate change. After college, I came back and worked for former Senate caucus and a lot with the Senate APW and Energy Natural Resources Committee on market design around the first iterations of the Fort Luton bills and also around the design of the international carbon trading system, secure protocol, clean development mechanism, things like that. After doing a state in law school and doing some consulting while I was in law school, I kind of went and shingled and did a lot of work on market design, master contract design, mainly in the energy commodity space, but continue to do a bunch of sustainability work in environmental market work and so on. I took advice of a good friend who said if you want to be a good transactional wearer, it would be your client for a few years. And so I went into business and was a VP at Pace School of Energy Services a company that the team sold to Siemens a few years back. When I was there, I did large-scale development work on renewables for energy systems and I've been advised a lot of multinational companies that run very complex supply chains and have a whole diversity of assets. And I think the first time I was introduced to the type of arbitrage and marital re-dynamics and I'll be talking about today was years ago when I started working and starting to bridge into the transactional work from the market design work and it's been quite interesting. So I worked in business as an executive for a number of years and then came back to the practice of law, joined her at the start of practice, really focused on the rise of distribution level assets. So in the energy sector that means think of generation assets that are located at the building level behind the meter at the campus level and so on. And the overall transformation of our power system from one that's a hub and a spoke system sending stuff pretty much one way down from the transmission system in large central station power plants to one that's more of a cellular mesh that has the ability to be self-healing to provide new market layers. I think we heard Michael talk yesterday about transactive energy, folks who are traditionally just being consumers of energy also becoming suppliers because they happen to have generation resources like solar systems, solar plus battery systems or even more elaborate and robust systems like cogeneration CHP systems on their property. So I met Daza when he was recommended by Jason and we teamed up on a client that was doing some interesting certificate of origin work and we kind of hit it off from there and he asked me to come in and talk a little bit about my impressions on applied distributed ledger technology and in particular applied the process. I am not a cryptocurrency whiz at all. In fact, my experience of cryptocurrency was talking to my partners who are former heads of the SEC enforcement office and watching them go, and I think we saw a few weeks ago and I said to Daza that he can circulate it around but the chair of the SEC set out a statement about their view of ICOs, ICOs as these are really investment contracts and my firm has long believed that you can certainly do these things. They can be great vehicles for capital raising to build not only do capital raising but community raising to a certain degree but at the same time they need to be registered on. Jimmy! Fantastic. There we go. This will be slightly better world for that person for an MBA in slums. Okay. Excuse me. No, that's great. It's funny because most of the counseling I've been doing around blockchain these days is talking to clients. The vast majority of the clients I engage with the issue is what's the underlying value proposition? What's the applied value proposition of a decentralized immutable ledger? Do you really have you thought through why would someone work a node? Why would someone mine? What is the value of the token at that point? How do you look at the function of that serving and does it make sense to have a full decentralization? You want to go for something that's semi-distributed. If you hear talk about consortium based or private blockchains the majority of the work that I've been doing have been looking into those dynamics. Really around how can you look at an enterprise map multiple processes that it's doing and then be able to look at where that centralized immutable ledger that kind of spying for a bunch of processes can be useful. So Dodson knows that I've been kind of skeptical for some time because you really in my world I want to see a business value proposition a process value proposition for why you're implementing this technology. It could be as ephemeral as kitties crypto kitties. Fascinating. It's amazing you think about it that Ethereum which is meant to run all of these enterprise oriented systems gets slowed down dramatically because people are expecting pictures of cats to eventually have intrinsic value. But it just goes to show you the internet was made for the cats I guess. Buy the cats for the cats is what friends say. So you can kind of see where I come at this I do a lot of structure work a lot of my clients come to me and say we want this how do we get there based on the underlying structure of electricity regulations and so on and you got a taste of that yesterday when Michael said you want to do this but no one wants to be regulated like utility that's a way to if you have to face that type of so that that's an example of how working with clients the structure around the legal frameworks and that often means changing ownership dynamics service flow dynamics and so on but finding a way to achieve the goal that they're working you know I think that kind of gives me a bit of an intro into starting to work with whiteboard and talking a little bit about some of the ways that we've been thinking about smart contracts and the dynamics around that and I'm going to talk a little bit about some of the state laws that have popped up recently around you know how they're looking at smart contracts and such so if it's okay with you you can start whiteboarding and you guys can get you know always ask me if my chicken scratch doesn't you know so smart contracts, automated contract systems interesting stuff and certainly no one has nailed down any of this electronically in the definitive sense you know it still has a lot of open issues and so I'm going to be probably asking more questions that I'm reaching answers here because that's kind of where we're at I think the prime question about smart contracts is the line between you know what is there as the contract and I'm going to use a little legal term for folks as lawyers it all makes sense I'm going to use K K equals contract that's just you have to get a law school you learn that for your first year so the question is is the software itself the contract or as I would argue is the contract using software slash a program and what's interesting is you talk to a lot of people and they will say this is really up in the air it has yet to be determined what I will say is this ladder you know smart contracts can be viewed as contracts using software as a program to execute as a mechanism to fulfill the obligations to perform under a contract is something that we've had in place for a long time and I'm going to give you guys some examples but regardless of how you look at them let's say you want to look at the software as the contract itself to have a contract legally you still need a right and this goes all the way back to common law on the statute of law which is pretty simple if I go up to you and I say over beers we're going to agree to both invest $75,000 in this enterprise and I come back to you the next day or a few days later and say hey we agreed that you were going to be putting in $75,000 of where is it my response is I didn't mind you and this goes all the way back to old common law from England where you have something called the statute of frauds which stood simply to say that if it's an important legal document legal arrangement between the parties you write the thing down well today means can be electronic and electronic records are obviously prolific so what is and I'll note here electronic record from a legal perspective equals a rating in the vast majority of instances if I we had done that same deal and we had just exchanged some emails with a decent amount of contractors or you had a contract with someone and the contract said the parties can agree through an electronic exchange on amending the contract and I sent you an email that says do you agree to this amendment and you write the back of the email and say yes that's my deal so the electronic form does not cease to make it a rating from a legal perspective in those instances now what is a rating what is a record if you look at ISO the ISO standard which is really the international standard is 15 or 89 the ISO standard here is that a record is evidence of an asset by an organization or purpose where it's in pursuit of a legal obligation a business transaction or so it is a type of record and so electronic writings are also on Ken's records and the real question is does the information contained in the electronic record match up with what that jurisdiction's requirements are to form a contract you know has their consideration are both parties obligated to do something has there been a bargain that's been struck and exchanged it out those types of dynamics so what's really interesting is where this is emerging and so on these people are asking questions can you use a blockchain to notarize so in other words the process that used to be you got together a person someone, the person to notary who has a legal authorization of a window including a special stamp that they're getting and a special record book that they have to keep when that person notarizes they're physically stamping and so on and what we're seeing now is a number of states under jurisdictions coming out and saying that if all the conditions are appropriate you can use blockchains, cryptographic technologies and so on to undertake memorization because it has that same assurance of recordation and so on that's emerging what's interesting from that question is what type of an e-mail is clear if I send you an e-mail I say yes to something I wouldn't argue that that can constitute acting as a signature if something is cryptographically signed what's the ID proof and verification authentication around who actually wielded the key and that's a dynamic that we're going to talk about a bit here which is when you go to fully atomized decentralized blockchains you often run the risk of single key, single point of authentication and if you lose that password, if you lose your key or someone else gets hold of it it can be a big problem and you might have read about this in the press that people are kind of saying do I go with the ripple gateway do I keep the switch network or something like that but one of the risks that you have with ripple on others is that if someone loses their main key that they get when they set up the gateway you can have an institution basically lose billions of dollars in a few minutes and it's to a degree irreversible and that question about what type of protections do folks really want in commerce and transactions and deals around irreversibility ID authentication you know firewalls around certain types of information and so on, those are always kind of a play here because again a lot of the products that I work with are looking at detail as a way to improve and integrate a whole bunch of processes that have overlapping inputs and outputs and with that it is one where you really have to ask how decentralized as I was joking with that was that how libertarian and non-centralized you really want to make it and there are certain applications where you really want to completely decentralized what you're offering but there's a lot of dynamics where the ability to go back and error correct the ability to outside the realm of coins have your folks who are working your nodes and you're wanting to get paid on a high service basis outside of having a cryptocurrency operating and again you can have things like with Ripple where the cryptocurrency is a bridge transactionally in and out but the real question is how does that perform that with the caches and some folks would argue that various systems out there just need to get to be more comfortable getting rid of collateral and holding accounts to deal with the currency risk on the transaction on both sides and for years networks where they don't force one party into taking currencies where as soon as the transfer closes it goes into the common currency which is the dollar and it comes out of the dollar to the local currency on the receiving end and it happens within a shorter time period and folks can contract around that currency having a cryptocurrency as the common currency bridge and you have to ask beyond the ease of the transfer of blockchain what more does that get you beyond using dollars than other dynamics so part of where a lot of this is going around smart contracts and on many contract systems in my view it comes down to really how much do you need how much you need with automated contracts so let's look at the Arizona smart contract law which has some interest in any of this so the Arizona smart contract law that's been put in place now basically has a few components excuse me I think it's being considered I'm not sure it's actually not it talks about an event driven program when defining when defining a smart contract it talks about using distributed ledger technology and then what I find is interesting it talks about that that technology can take custody and do instrument transfer what's interesting is that you take this out and you already have this operating on multiple levels in the commodities market for some time through basically the establishment of master rates and kind of so if I was familiar how the base master model works can you say it partly because we're joined by you're going to love this one of the core developers for Blockly Scratch Scratch Blockly rather and some other folks who don't have a legal background and so it would be helpful and also just for posterity if you could just do a quick squid I encounter Scratch because my eight-year-olds second graders are at a computer version course and there's a little amount and I thought it was actually fascinating that they're on track that's being JavaScript before they're out on multiple metrics and what I thought was so cool about Scratch and Blockly and so on is the ability to create a visualization so that non-quantitative qualitative focused people like me in particular business executives division heads, senior vice presidents who know the business process that they're overseeing but if you ask them would you like to get together and work on you know mapping how distributed by your technology might assist your business they would say oh wow I'm not qualified to do that so still but if you take Blockly you may basically turn each of those blocks in shapes keep the Boolean logic around the process but basically adopt business terminology so that you map a set of blocks to what someone who is in manufacturing would need for their business but someone in the service sector would need for their business so an immediate company would need for their business we could use a dynamic like that to basically get all the division heads that come out of the block interface we could view the horizontal linkages around all the processes and show them where a centralized ledger might assist and I say centralized just in the sense that all the processes are using the distributed ledger technology in a centralized manner where the ledger itself might be distributed you know through a consortium or a private basis you know through approved selection and so on but the overall value that I saw it was just a brilliant way to visualize basic logic processes and what I thought was so cool is that you know I see my kids right now because of their work with Scratch and so on being able to do the logic games that I had to take on the LSAT and was like oh man you know how do I handle this thing you know and like there aren't any rules set you know and so it was really a pleasure you know watching them get into that and my impression was wow you know if kids can do it business executives can do it and that you know it could hold promise I think playing a strategic playing and I love playing with blocks so encapsulate complexity into a module that can be interoperable and slot it in into a sequence this is the only way we're ever going to make it intact to the almost infinite complexity of the digital age so here's something core here making it so that you know like elementary school kids can do it all kinds of sets for computing when we compute the law we should expect nothing less you'd be shocked that it's usually the IT departments and maybe in a very you know aware organization to see other's office if they've done any examination of it have a sense of how processes overlap from you know a resource at an operational level you know in their company it's more common to find you know the division side with all and running completely separate systems different vendors you know and you you know they argue that there's a lot of redundancy but again some of the dynamics of destroyed ledger technology can deal with those you know those issues so it's I thought it was a cool scam program my kids made it really all right so back to some state laws that are being underdeveloped looking at what's going on here and what is again interesting here is that if you take out the destroyed ledger technology these dynamics were in place for some time and the way that we've seen them in place has been in many cases master agreement structures where let's say I want to sell new widgets or you know pick something more fun than widgets is though what are we selling with us? we're going to be selling a variety of crypto critters today which are actually puppies okay which are actually puppies well with doggy fun so we have master agreement for you know large eye animal pictures oh I know the crypto community would be like oh yes way more solid than that but yeah you know the pictures so what we would do with a master agreement between Dawes and I is we would say okay I know that Dawes wants to buy crypto puppies from me for the foreseeable future probably five next five years at least so what we do is we say okay well we're going to put in place a contract that will define the overall relationship between me as seller of the crypto puppies and him as buyer of the crypto puppies we would mortalize this agreement in a master agreement which are often made what's called evergreen which means they keep going going until someone kills someone decides to terminate it so you put the master agreement in place and what happens is we would agree under the master agreement to when we undertake trades master agreement might say that either of us can initiate trade it might also say that every year Dawes has to buy at least 100 crypto puppies at a volume you would be in breach if he doesn't buy that much crypto puppies but maybe it says that you know what my crypto puppy manufacturing is is really good I'm confident I can produce a lot of puppies so I'll guarantee him that he has to buy 100 crypto puppies but if he wants to buy 1000 crypto puppies every year I'll sell him 1000 and you can have other dynamics in these contracts around selling stuff for services that make them contingent in other words if I only have 120 crypto puppies Daza can't say during the fall if I have a contingent provision there we're only selling him 120 crypto puppies as opposed to the 1000 so there's ways that you can vary the relationship now what happens is with these master agreements you put them in place and you often put in the schedules of something that's called confirmation which is a letter of agreement that relates to and is governed by the master agreement although in some instances and this is where deals often get tricky some people will sneak in at the confirm to get the master agreement I'm sure he always run into this at times where they try to undo they try to redo and renegotiate the terms of the master through the confirm but that's the majority of the times the confirm is governed by the master agreement that says the terms and so a trade trigger is Daza contacts me for the notice provision under this and says I want to buy 5 crypto puppies next month and we execute the confirm that we already agreed to the form load and they win the 5 but is it getting delivered how much is he paying before them if we haven't already set price master agreements sometimes have price schedules other times they have price schedules where it's market market and we're going to talk about market markets in a few minutes where it says I will send you the crypto puppy for 5% discount from the coin brace list price for crypto balls so the bottom line is that the confirmation is how it executes what's interesting is that confirmations have been much chronic for a long long time and these deal dynamics and the way the confirmation gets done agreed to sign and executed happens electronically and has happened electronically a long time a lot of times the confirmation actually executes then through another agreement and you have other agreements that serve as basically mechanism agreements and I'll give you an example of the ISDA International Standards Agreement can be used for commodities trading that are both physically settled or derivatives trading that are financially settled but it's an example of an agreement that basically provides the mechanism under these two so I would have the master agreement I had in one schedule a form of confirmation and in another schedule I'd have the form of the ISDA which is in itself the master agreement would be just telling what the credit schedules have been and so sometimes people put in tweets to amend certain sections of the master but this process of setting up a framework contractual framework but then having confirmations is the underlying way that we've seen what I'm going to talk about here in a few minutes I'm going to make contract systems operate that check these two boxes for the most part at least this one might not check this one this one is often occurring through the mechanism contract which will specify either an over the counter deal so a binaural exchange or it will specify an exchange trade where you're trading a contract on an exchange as a way to concentrate the deal and try to deal so what's interesting I found is the term smart we've had these types of systems in place for a long time I'm going to draw up one in a second when I hear about smart contracts they relate to it what's interesting about smart contracts is where people talk about it being a software as the contract yes you can have that it can be a writing it can form a contract but what's fascinating is taking it to the point where the systems in the program itself can begin to pick up for the subjective analytics for the you know and so on folks are working on algorithms a lot of instances there's quite a bit of data that goes into making those calls and there's a lot of legal judgment that goes in and what's fascinating is if you look at how smart contracts have been really introduced lately investment vehicles like the distributed timeless organization sounds awfully cool but even the most die-hard blockchain fans eventually wanted real people arguing over what the intent is and it also showed a dynamic where even if the goal is to have a completely self-executing process there's times where people want to step up and look at what the outcome is some reversibility to this being able to catch errors being able to track proceeds and we'll point out the dynamics that we're used to in the banking system so going forward part of the balance here for smart contracts for investment is efficiency that saves you on all the process counting legal fees and dynamics and so on but also having enough interface and so on until we hit singularity and then but until that point you see that people want lawyers arguing over what was the intent how does it work and so on it is interesting stuff are smart contracts contracts it's still an open question is a contract that's purely a contract? well if that software outputs the core legal terms that we need under common law from a contract it's a pretty good case it is the question is that people sign up to that that their signature execute was the cryptographical key someone used to say I agree to this investment count as a sign of the signature but would laws triggering notarization kick in, could that serve as a notary these are all the type of open questions right now but overall just being program doesn't obliterate it's function as a contract it's still a contract it has the core elements and why is this important? it's important because it's enforceable it does and I just agreed to the crypto puppy sale verbally and it comes to me and says you know what end of the year 100,000 with the puppies under my contract and I'm like don't pound a sale I know the strip of the puppies I'm reading them myself those puppies are more valuable than you could ever imagine where does it go to say well Chris said he'd do this he promised I'd count it all I rely on Chris's promise that he'd perform that we had this bargain well that's where you have to have the right having the contract and you end up on it's own two legs a triangle is a writing is very important for it's enforceability and again enforceability is a dynamic that comes to play when you have to ask is fully decentralizing, fully atomizing something across a hundreds of thousands of point distributed ledger with hundreds of thousands of nodes what does that mean for the enforceability of obligations that are kind of flowing through it you argue well that's where you now have these service providers that set out kind of set the ancillary to the chains that if they need to we'll write in another block the correct or balanced or net out the transaction that went back and you are seeing some people who are looking to do this stuff providing those provisions where they don't require correction of the record but they require a subsequent block at its net to net the error that was in the transaction sequence that came up and it was viewed I'm the energy attorney and so what really bugs me about what's going on right now with blockchain is the amount of energy that's used by the way I'm sorry but I suppose to say we ban the blockchain so just like say a blockchain blockchain technology, bitcoin blockchain because like yeah no no it's not so the bitcoin's watching and I think with some of the examples I'm sure you guys have heard of these stats but bitcoin 7 transactions a second the Visa network 60,000 transactions in that same sector and then if you try to move blockchain the way it works today up to the transactional level of like say just the Visa network and the international network it will require as much energy as the entire world uses right now which is why it's important to find ways to speed up and so on I mean proof of work in the complex map is fascinating and important to the process but it takes a lot of transistors to acquire and a lot of as our friend was pointing out earlier a lot of a lot of electricity a lot of churn a lot of activity a lot of what otherwise could be useful time to work and one could argue that that's essential for something that's fully distributed fully decentralized but at the same time finding ways to make it so that all of the nodes don't have to crush that much power when pushing the chain out is important and you know one of the things that I was talking about is there are ways that you could you know create milestones temporal brakes in the chain and take that your chain segment compress it you know and do it in an encryption so that when it's decompressed it can only get decompressed back to original form and the decompression errors the other nodes will catch and it would require another decompression sequence like a decompression sequence on the chain but the reality is is that right now the sheer energy you see is substantial and look there's also other issues too with cryptocurrency while I'm talking about cryptocurrencies recent news reports pointing to all of the exchanges and more exchanges have lost their investors money than the ones who have not lost their investors money they're also looking at trading diamonds because again these exchanges are not regulated at least the older ones some of the newer ones are getting appropriate regulations in place but some of the older ones certainly weren't regulated and so this type of market manipulation behavior that you're used to seeing in markets by regulatory authorities and the two standard forms of that are horizontal market power and vertical market power energy there's absolutely no way that you can ask your cameo so I read just yesterday that potentially upwards of 600% of Bitcoin's price went up was due to one actor pumping and dumping one actor if you look at traditional exchanges and so on you have all of these detailed rules this market manipulation to be a market maker on that exchange which means that I have a standing bid and offer on that exchange you have to satisfy a whole bunch of rules and other dynamics to make sure that you are not artificially influenced the market in the brave new frontier of decentralized currency it does give rise to the possibility that you can have actors that substantially manipulate digital currency so we just have to see how regulation basically works this way in and I don't think they're going any obviously the markets are here to stay but I think it's safe to say that there's going to be substantially more regulated in the future than in our account at least such that normal basic fair dealing can occur between markets and that's what market manipulation really addresses it creates a more even playing field so that you can't have a few big dogs decide our bottom line is better if the price goes this way and I'm just going to make that happen in our overall market so then why do you explain the Fed and they go forward central banking system and so on I mean look you can make a lot of arguments about the loop cycles that are created with quantitative easing and the rest of it but central banks, most redwoods have the general agreement that they're tied to countries GEPs they can control inflation and they provide importantly in this country links to things like the FDIC which creates the security that anybody who puts their hard-earned money to something is actually going to lose it the next day with some hacks let me help you out here a little bit too which is so you can expect a lot of this questions from right across the way you're about to meet some obviously Bitcoin maximalists at your request and some other folks so one way to look at that question is to say we're going to what we're talking about and especially where we're headed after a lecture when we break into teams is looking at composition of systems and so you could say that at the market layer there's many ways to compose a system and there's rules so there are implied rules they're not written down like regulations and statutes for the market layer of Bitcoin and for Ethereum but they're baked into the code and they're understood and they're discussed there are rules for markets for being big sorry for a lot of these let's say for stocks for sure and then for some supply chains you can read something called the trading partner that defines basically many market rules within what can be billion dollar supply chains of many players that can't fire each other to come together and then there are a set of rules there's a decision and there's a choice about where they put it on a spectrum of centralization versus and what the priorities were they may or may not be how you would compose a market for say an energy grid or for a supply chain probably wouldn't be such a currency market but since we're talking about Bitcoin now it's similar as to a currency market so comparing it to the Federal Reserve makes a lot of sense but say what's most notable about the answer to the question is we can actually ascertain in like in many lawyer way like write down the assumptions the actual rules and the mechanisms and the methods at the market layer and at the contract layer and down to the transaction layer and begin to model are we getting closer or further from the outcomes and the like the system dynamics that we see how delightful okay bring it home so we had talked yesterday about a micro grid and I figured I could use that as a scenario to map out the money and contract systems that I help set up and see in the past but first what I'll do is I'll show you a very basic diagram that shows how they work and we're going to relate it back to where Arizona, which is very common in many other states are going in terms of what we believe can be a binding enforceable grid so what you have at the most simple thing is a bunch of assets to start with and operate in different cultures and so when we talk about a micro grid we can talk about a micro grid that's multi customer micro grid one where it has cogeneration, gas fire power plants solar arrays battery storage, thermal storage things like that, controls on the buildings and so on and we could for the benefit of the folks here we can make one of the customers base we can make maybe some of the other customers some of the office first responder centers and things like that but before we get into the details of how assets in a micro grid can assume different operational cultures the key thing to remember here is that you have a whole bunch of of these assets that can work in different ways and they will work in different ways based on signals that they get from the market so each of these assets right here are market marks this one could be the price of natural gas the fire and the cogeneration plant in the micro grid this one could be the price of steel that the smelting plant that's located within this large micro grid can get when they run their work furnaces in Celsius this one could be the value of serving customers within the micro grid with power generated from the power plant basically the value of the electricity market at a great time this could be another dynamic here on the value of another form of production from manufacturing that comes out but the bottom line here is all of these represents market indicators market marks and so each of these dots might be something like gas price above this threshold power price above this threshold below this threshold so what these market marks do is they feed in what I'm drawing out here which is an automated contract system that runs off a merit order algorithm these all fit in here what is a merit order algorithm and what all that is basically doing is running a greater than lesser than logical sequence each of these market marks when coming to the algorithm get interpreted at this layer into scenarios that combine different market conditions so one of those scenarios might be x1 one of the scenarios might be y3 one of them might be you know z4 you name it and the merit order algorithm is basically going to be taught to calculate how these scenarios come together now the reason you have scenarios is because there's going to be operational constraints on what you kind of can't do for instance I can't decide to sell the output of my cogeneration plant base in the microgrid to the wholesale power market around me if I promise to provide that power on site because there is a power quality issue with using grid imports or something like that I can't arbitrage my gas transportation capacity the money I'm paying to move gas on the pipeline to my cogeneration plant I can't arbitrage that and sell that out to the market if I need that gas to run my plants to do all these other things so there's constraints in how these scenarios work and the scenarios will be things such as cogeneration plant operates and provides steam to this off-taker this the solar array is going to provide power to this off-taker and so on and so you have these combinations on the scenarios where based on different market marks the microgrid as an example will be able to form different types of operational postures now the merit worker algorithm knows what each of these combinations can look like based on the different market marks and will simply order them based on the operational posture and basically kick out a response to a number of master agreements saying we're going to sell this gas much gas out of the gas market and not use it to run because of the pricing at this point in time we're going to sell this much steam to this person we're going to sell this much solar output to this person we're also going to import this much power from the local utility at this rate because we can make more money on selling out to the wholesale market for that component of the load we need to serve on site there really is a ton of different combinations and one of the things that's kind of making your head hurt a little bit about this as well when Chris was talking about a microgrid and I thought power plants basically ran they're impressed there has been assets that combine load and generation in a unified resource often that combines a ton of small aggregates, a bunch of smaller resources that can be as flexible as microgrids that have resources out there and I'll give you an example Princeton University that runs one of the most advanced grid integrated microgrids in the world folks I had a pleasure working with regularly they can respond to the grid operation in New Jersey in PJM to basically help keep the frequency on the overall grid balanced at 60 hertz they can put upwards of 6 megawatts of power onto the grid to lead or lag the frequency signal in less than 2 seconds they use it using area-to-area turbines in a co-gen system but the actual safety is the depth of things you see but the reality for microgrids is they can form all these different postures which makes this more complex so we're looking at what the markets indicate when the program pulls the marks from the markets pulls them into a merry-go-round algorithm builds the scenarios first and then runs the scenarios and then it says it outputs saying this is how everything should operate to make the most money at this point in time so what happens is how does it actually execute a system like this so it comes down and you have so imagine this crossover so you have basically the signal from the merry-go-round and saying ok let's say we're going to sell this much power this may make a lot of power out to the market it sends the signal the parties that I'm selling the power to you already have a master of treatment in place that's this power layer and that's a written contract however the confirmation process and the execution of the confirmations in that is programmed automatic self-executive so it takes this signal pulls into market mark and then automatically generates at this layer here the program automatically generates the confirm and then starts the execution sequence which could be through an exchange through a contract like the ISDA another mechanism agreement and that those are often especially it's through exchange and so on those you can handle through electronic clearing houses and the truck so that's the self-executing part but let's say there's a problem let's say the deal goes through and someone says you know what for whatever reason we can't perform the way the confirmation is expected to you know maybe we're in a forced outage maybe there's some other kind of operational problem or maybe just maybe I look at my liquidated damages for not performing with you and this other guy I can sell with you 25% of all those liquidated damages so I'm just going to hold the fault and pay you in penalty and go this way and sell you something else but whatever it ends up being the outer layer here which isn't programmed but this is the contractually and that's the master contract layer so when there's a dispute it kicks out of the automatic self-executing program layer to the master contract layer where the parties can get together through dispute resolution sequence whatever it might be often in my world we force the executives to get together and try to work it out and if they can't do it then we either move on to arbitration mediation litigation but a nice cup of tea I'm not a lady here I like to say what you're doing to your work folks you deal with that stuff as you have to but I like the constructing and building part of the law I have a lot of respectful litigators who handle stuff and shit it's a pain actually one more little practice note of what we're doing sure is as you're talking just pulling out a few little nuggets for later to feed into the break out sessions so on dispute resolution you mentioned there's a complaint and some of the stuff is like the thing didn't process oh you haven't updated your drivers to the whatever so it's like just little stuff operations then you mention litigation really that would be the end of the road but in the middle though what I wanted to highlight is that when you're architecting these systems there's a lot of opportunity to build in but not even external arbitration but just like review you know almost sort of like a and I've done this in quite a few commercial systems where you may have like a panel of folks that are neutral or that have some neutral like this pliers and the buyers and the vendors and the transaction processors they kind of look at things and sort of make a call and then perhaps at the end might even as an escalation before you can get to anything like arbitration or anything like the formal dispute resolution could actually help basically work out not like mediation but like maybe work out like oh here's an interpretation of that role or they can basically absorb a lot of the impact of big disputes internally within the system as part of an escalation procedure you could even hear a couple of warnings suspensions and so forth before you kick it out to this. So the idea of a composition of systems that are contract based and have like a rules layer like in a master branch that can contain transactions one of the big words you get when you bother to think something through so much is on the myriad of opportunities to massage dispute resolution so that sometimes it does make a right into what we call a dispute sorry to interrupt you no that's right and where you can avoid that it's very helpful a lot of times the disputes around this can be fairly clear cut and handled almost programmatically I didn't deliver as much as I said but I do think your meter indicated that and someone would say that's where having metering networks use distributed ledger technology to provide transparent recordation and so on can be important metering the core question of how much did I give to you or didn't give to you and assuring that meter calibration and all the rest of it stays correct is a big deal a lot of the folks I work with in the commodity space it's several billions of dollars a dollar if you're putting through their systems but it's this example here though is an example of something a single entity would do in making an operational decision if we use the microgrid example the person running this calculation could be for instance the energy developer that was retained by the host let's say an army base or an enhanced use of treatment an enhanced use of leasing or a utility energy services agreements energy service performance contract type thing it could be any number of people who were actually on the campus where the microgrid's been installed but you don't have to have the person who's enjoying the benefits of it also be the person who builds it operates it and importantly provides all the electronics and so this is an example where you could have a third party finance to develop microgrid there are certain business rules to how the microgrid needs to be operated for instance if the grid is out you will keep the power lights on the communication center updates going regardless it's the top of the critical load list it's not on the load shed but in this example you factor those dynamics here into the scenarios on how the scenarios those constraints those business rules are on site as we call them but this whole process could be run by on a daily basis by the energy developer who's owning and operating the microgrid who again has the ability to provide power to everybody in the microgrid from either importing power from the grid or by making it within the microgrid of any number of different ways they would be the one running this decision tree to determine what is the highest and best value of what I have for all these assets now why is this kind of cool in the context of a microgrid and why is this important going ahead for smart infrastructure in general for this country smart infrastructure can actually smart infrastructure has the ability to have for granular data measurements has the ability to actuate and provide more flexible services to provide the base that can open up new market layers and things like that and so what you see here in this decision making sequence is all enabled by the fact that I actually have physically these arbitrage opportunities that these scenarios come together where I can do these arbitrages so where does this kind of thing make sense it makes sense when you're building on infrastructure there's a lot of actuation and flexibility on how we operate and assume a whole bunch of different operational profiles one of the first things that introduced me to this was working with clients in the mining sector who ran smelters and had big power plants on site to run those smelters because you want to use a lot of juice run art for us man they use a lot of power and at the same time a lot of those clients had asked themselves on any given day given the pricing on the London metals exchange does it is it more attractive economically for me to use the power to make the smelter level or is it more attractive economically for me to use the power plant that I also run that on site and just sell power in the market how do I make that decision that's an example of the initial arbitrage that's been going and in the commodity space in particular in the power space the over the counter market the buy bottom market for these kind of arbitrages is very substantial and again people will set them up where when it comes to taking custody and instrument transfer this stuff can still get handled on the mechanism contract that executes and maybe that's trading a contract on intercontinental exchange maybe that's trading any number of ways but the agreement between the parties to undertake the action to execute over the counter market is based on the relationship established in the master agreement which I tell clients if you have the opportunity for a multi-point arbitrage and to run an economic mirror order through your own operations make sure your master agreements have the flexibility within them to do that don't bind yourself in how you agree to perform and provide some services in a way that you can't take advantage of say a really really cold winter when everyone cranks up their their gas heating and all of a sudden the price to move natural gas from down in Louisiana all the way up to Boston is now like 38 bucks and of that 38 bucks or 42 bucks how much of that do you think actually goes to pay for the gas itself after a while so understanding what the different flexibilities that can come are important to doing this and what makes it a smart contract system as we call it is that all of the master agreements that have the program self executing components all feed into an overall unified mirror order algorithm that automatically pulls the market marks into it to maximize profitability through the operational postures that you have the ability to assume that right there again this is so great in the example of the micro great why is this so great to inform is that as we adapt smart infrastructure whether it's transportation sector whether it's the power sector as we have that smarter we're actuating infrastructure we're going to be able to do more in terms of how we maximize the economics entities and maximize the economics around it and that also includes having market marks here that have not existed before that represent market leaders that are opening up that technology allows for more transacted interactions between people that used to just be customers but now we're both customers and suppliers and producers at the same time and that's when you look at what's happening with some really fascinating stuff that L3 and other folks are giving and I have the pleasure to work with the L3 guys Brooklyn micro it's all about using distributed electric technology to have a immutable ledger that allows you to open up market layers and provide for transacted dynamics between folks that haven't occurred in the past and what ties all together the great app the nifty interface the same thing that makes it easy for the consumer to do so to feel like they're participating what has to catch up in my space so all this that's going on right now are the rules the law I like to joke about micro greats one thing that every jurisdiction in the country has common around micro grids is that their legal framework is not set up to the common which can be great for attorneys because I do an awful lot of structuring when someone says I want to have this micro great we come in and say well here's how you have to structure the deal to get it done but folks talk about Puerto Rico unfortunately the micro grid breaks that they're considering the laws that they're considering now are really restrictive for third parties to come in and develop their own and operate micro grids and that's really problematic because one of the deal structures that we're seeing emerge in the smart grid space is the concept of someone coming in and saying hey if you let me provide you energy services over the long term or part of your energy services is a long term and I'm confident that you're going to stay in your bills and so on we're seeing energy developers more and more being comfortable entering into really long term deals with micro grid customers and so on and others to provide energy services and with that comes the energy developer doing third party finance bringing the capital to kind of make it happen and that kicks a lot of this into the project finance space from what Michael was talking about yesterday where someone project finance is all based on off paper credit the person who's buying what I'm selling and so there are a lot of dynamics there but what you see here is an example of a dynamic that a single entity can do now imagine multiple entities who begin to have the flexibility because they've adopted more smart infrastructure and more smart operations systems that undertake these arbitrage these dynamics and so on and imagine the points the markets that can feed and create different operational scenarios and conditions expand and that's really what does and I talk to you both about not only what's happening but strictly ledger technology automated contract systems smart contracts and these self executing program systems it really is it really is pushing in lock set with the drive for better stuff and when I mean better stuff your iPhone or equipment all of our electronic devices all of our equipment one thing that you can say is pretty common is that they keep adding capabilities they keep adding functionality they keep adding flexibility and providing and that's not just on electronic basis that's going to be the roads you drive home that's going to be the power systems that you use that's going to be the water systems that you use the waste systems more and more of that is coming and to achieve that kind of symbiosis of input and output in our society we're going to need to have the software and operational layers that can build off of that smart infrastructure again micro grids are an example of that and this type of automated contract system even though this is an example of just one entity doing is I think where a lot of the features are thank you that was awesome that was awesome I'm glad to finally give you the space to say that all the way through and then to be able to go back and hear it again more absorb everything that you said but one thing I want to just highlight before we go forward that person liked it too I'll throw some flour to your teeth one thing I'll note too that the Meridord this is exactly how the auction markets work in the power sector so when you bid into the day I had market to say I'll sell X amount at this price and you basically submit your curve to the person who's running the market these people say they basically submit a curve of what they'll produce the energy markets and the rest of them run a Meridord algorithm and they clear the system based on the last year running so before they handle congestion dynamics and so on in many of the power markets around the world what happens is they run Meridord and the last unit running that has to run to serve low the price that it quotes then clears the market and you get to that price through a Meridord algorithm so you did it Dispatch what I was going to ask or say or highlight and then ask you to extrapolate a little bit maybe you want to extrapolate a little more if you look at the so a lot of what we see here is good just good morning could be occurring a virus but you have like a master agreement you've got contracts and transactions and reporting self-execution and student speed the part of it that I want to highlight is there's something that allows for an algorithmic optimization that permits in this case a transactional network I would call this to support and reflect the business priorities and to operate according to the legal group arrangements because the technology basically correctly implements the rules I think that there's something that so as we look forward I think when we when we build things we should all contain the idea of what Chris is calling a merit order say algorithm perhaps it's a greater than sequence you know is this scenario greater than this scenario you combine the scenarios that can exist physically in the real world and you test one against the other and when you get to the the greater than sequence they'll order themselves in here so let's call it like a prop it's a procedure and it's a computation that's the word I'm looking for so this is about computational law and so what we have here is something that is the result of inputs that are that actually are ascertainable based on data through sensors and interfaces that are telling us what's happening that's critical for this way of thinking now it's the field in some ways but we've got plenty of situations like that and increasingly situations are like that number two the rules are assume that the data is coming in an expected format and that there's a system that will process the rules and that they can apply the rules such that there's an agreed prioritization and a merit order in this case would pop out there are other kinds of optimizations where we're looking to do like load balancing or other sorts and those would kick in as constraints that would constrain the scenarios and what the scenario values would reflect before it ran the operational sensory constraint helps to form the scenarios combined with the market marks which are it could be NYMEX says this is the price of this contract and that so now we talked about inputs we talked about the processing according to rules and then there's an output and so the output might be like what like popping to the final price on something and like releasing the output of this usually kicks out to the person who's running it so like a single entity is making this decision on the deals they want to do with a bunch of other people it will kick them out a spreadsheet that gives them the merit order and then that spreadsheet will indicate that if they've got it well it'll set up to automatically set notices in the counterpart then they fill in the confirm send the confirm to the counterpart and then execute then execute the confirm and they would basically automatically fill out the confirm send the confirm to both parties and the term is the master agreement without the confirm self-execute and then you'd have the master premium usually provides for some kind of corrective or true up cycle if there was an issue with the volumes or something like that that would just happen dynamite before we kind of get we're doing great on time before we kind of get to the next phase where we take some of the concepts that Chris mentioned and kind of work with them a little bit there's a few tools that Brian and I and methods that Brian helped back fill I think all the Brian's can probably help because we're all somewhat hacky and then but I want to ask is there any kind of reflections or comments or questions observations on what we just heard Tammy I was wondering you were saying how you see Rebecca as being the future so do you rule kind of a lot of that to happen do you still see a need for like a grid at all or okay Rebecca the mega grid serves I mean if you have on-site generation let's say you can afford to put on on-site generation and put it up or you do a deal where you get a service provider to do you're basically using your ongoing load as an asset to get the deal working you will still look at the main grid as backup as a battery part of what makes a lot of these arbitrages work is that unless the micro grid needs the island in other words close its circuits and stay powered when the grid around is down unless it needs the island many micro grid customers really don't care if the power is being imported off the grid and being procured by their micro grid operator or if the power is coming directly from the power houses within the micro grid and so obviously if you need the island then the business rules will kick in and the micro grid operator will be told you need to you know keep running internally now that's easy too because you can't export it unless you're helping with restoration but it is a very interesting question the price of when I first got started in the clean energy space you'd go to a renewable energy conference and you were likely to hear a drum circle outside and over the years that evolved to where the community would get together the world over Soria and it became a major investment and more investments were made in clean energy and renewables you know over the last few years and any other energy you know sources globally that's really pulling ahead there was just a solicitation out in Colorado by excel and utility looking for long term energy sources and solar and wind plus battery storage BL coal, natural gas all of the other sources in the cost so I really firmly believe that our grandkids are going to look at us and be like the world where most of the buildings didn't power themselves that's just bizarre you combine that with advances in flow batteries like graphene based batteries you combine that with advances in solar people have now gotten solar cells down to the less than a width of a human hair and so we are just years away from your next hoodie powering your iPhone I kid you not and so we really are going to a world where it's going to move to a distributed mesh and what that's going to mean is we're still going to have the main grid the transmission system a lot of the key existing central station power plants but they're going to operate more as a catchall and a backup we're kind of a marginal provider we're going to the future most of the energy we use is going to be generated locally on-site and so on now there are challenges there's not enough free land in Puerto Rico to satisfy that grid's need with solar batteries and solar efficiencies are going to come down to that level for quite some time that's why places like that are still going to need hopefully they'll get some LNG gasification terminals done and they can start using natural gas on-site and so on heavy bunker oil that they use now which is really nasty stuff to burn his power but there is going to be a need into the future it's not going to go the way of a horse and buggy kind of as fast as the adoption of the automobile but it's going to streamline and it's going to become a whole lot smarter and by that I mean we're going to have more sensory more controls and the grid is going to become dramatically more self human such that when there's a problem the grid will be able to isolate the problem and instead of having a cascade of multiple circuits going down just one or two will go now and again and distributed resources will be able to hold the grid out and so yeah it is going to happen but probably not in our lifetimes would there be a consolidation of all the utilities then because they could sort of be a chart and how would the utilities be money if they're managing well that's the penultimate question that utilities face right now is how do we make money when the traditional model is we get paid for every electron we deliver well in a world where it's not just about the electron being delivered but what's the quality of service and the options I have on how the electrons being delivered utilities sort of have things to change the business model and this is something I work on an awful lot in my work representing the resources coalition and with a lot of utilities clients and others I'll point out that the utilities that are smart and forward looking have realized that the days of their business model operating like a pipeline from big power plants down the consumers are ending and the days of them operating like a platform where multiple service providers can utilize it to provide a whole host of services that's where the future is going for the utilities thanks Tammy so we've got a couple of good questions on telegram yes that's on that I think so Mr. Popper when we have a telegram yeah well we have it's great because I read into some of the questions so Amanda Brown asks if you have any research or examples of failure of these sequences because of business inputs then also how can or do you expect artificial intelligence to optimize so the first one certainly seen failures in many contract systems but that's where you have the outer layer of the master agreement that provides the overall nature of the bargain including what's the dispute resolution sequence and so the system kicks out doesn't automatic confirm I see it I look at the market and I say wait a minute I don't expect this you know I thought I was going to get paid more for our agreements then you're going through a dispute resolution sequence but the way we set these up is that the master agreements allow the flexibility for the person who is running the mirror order on how they want to operate in the most economically beneficial manner constrained by business rules and security and safety constraints so actually while we're on failure mode this is really critical because it gets us into self healing and the the capability to adapt which is a big part of the smarts and so you talk a little bit about when things have gone awry when there's been these sort of failures or needs to have conversations or to take other measures that are remedial where do they happen in particular the smart grid land is great but in particular when you do these automated people systems where are these failure points that you've noticed I think the failure point comes in well I think there's a central assumption failure that happens by a lot of people who participate that they assume especially if you're in a system where the algorithm is not being run by one entity as in this one but everyone is looking at multiple parties relying on the output of the algorithm as to how they will transact which is different from this one this one one party is being told by the algorithm what the highest and best use of their assets is from an operational standpoint and then they execute that but if you have multiple parties on the algorithm and the AO is an example of this then I understand the dynamics of that algorithm and how it's going to help but given different conditions through AI that I assume often absolutely unexpected way AI will get to point A to point B on something that I have my mind wrapped around that and that's when you end up getting surprised to see in my world when you get to the point where a dispute is raised it usually kicks in that humans kicking in and then taking a look and seeing how that looks and operates the good news is that as you set these up right they run on auto-tire for years without problems and they can really generate a ton more value than taking a more simplistic process by process transaction by transaction approach the AI is fascinating on a lot of this stuff I think I actually look at AI as a safety net function for how a lot of these would operate in that the AI would be able to see take in a broader range of data points on operational physical financial market conditions and then be able to catch where basically inform you where one scenario because of this particular set of conditions that comes out here might be really pushing it at least initially providing a safety net as these systems set up and eventually it will do more than just inform as an input to the merit order it will run the merit order itself probably against multiple merit orders and all kinds of logic sequences that I know I think would work just perfect so Mila the camera girl has a quick question this is kind of a broad question what are your thoughts on algorithm pollution do you think AI could help to start some issues that may arise due to that I mean I kind of like yeah I mean that if you had an AI who could come in and say an AI could help someone understand how algorithms how the different output sets could look in a way that a bunch of humans who have each written a separate set of algorithms that they then try to stack up couldn't really wrap their mind around the way all those output sets could come and so from an investments perspective that means that I can't diligence the polls of my risk scenarios and therefore there's a potentially a risk so I mean I look at AI as a at least initially as really sort of as a safety but in advance as a diligence function to be able to chart the white swan outlier scenarios that could kick out of an autonomous operation of multiple algorithms. Good question. Are there other countries that have optimized the use of microgrids? Not really. I mean they're they're I would argue that the most advanced integrated microgrids are here in this country Princeton University is an example and so on you have other countries that are pushing forward on remote microgrids like a lot of folks are looking to to the developing world and others that have yet to have parts of the world that for instance totally skipped over landlines I went right to sell towers and so on who found that they could get over credit issues you know with micro transactions and telecom by establishing payment histories through phone transactions and so on and so there are a lot of places where the grid is not already built out people are looking at what's called removed microgrids which are basically microgrids that always are an item just powering themselves but the cool thing about microgrids is all the technological pieces that give them we have and there's really not a technology risk so much to them it's just really a regulatory risk execution risk and we have some ideas about how to structure the technical distribution such that it may not be legitimately not construed as a distribution of power to a consumer may avoid not evade some of the regulation that's right as we discussed yesterday there's a kind of a core dynamic that you see in a lot of jurisdictions where what triggers utility status is not making power or steam using it but rather distributing it one end and distributing it to another and so you create a self distribution within the microgrid and it basically turns the microgrid into kind of one chunk as the utility sees it the microgrid itself is a utility customer and the operator interacts with utility and so on so did you know one thing that came up with dinner last night was a question of transactions and what is a transaction exactly a transactional network versus interactions somebody brought up these networks are really about interactions so one of the things that you noted was from a legal perspective which is reflected with regulation when you have an entity that distributes in this case energy to another entity that triggers a legal regime and there's a certain common design pattern I think in the law where we talk about a type of interaction where it's an interaction between two entities by which we mean legal entities so we can sue and be sued you know in a very broad sense like shipping and receiving is an entity like an object model in the ERP system we totally call it an entity versus accounting is an entity but a legal entity I think applied in your a person a legal person something about a legal entity legal entity interactions and then so one of the things that we might want that we'll probably want to play with when we get into into a kind of architecture modeling mode will be this really interesting idea of structuring this system such that it is coterminous with a legal entity like so we created a 501c6 trade association for the consortium or we created a quasi-public entity for the port authority or we created a whatever you know so this idea of having an entity that is a single legal entity within which we can encapsulate and structure transactions and layer though at the high level master rules level contract level, transaction level logging level activity level I think is going to be powerful it's the power of the collective and I'm not always standing on my comments on cryptocurrency and libertarian dynamics my view of the markets is very libertarian all about nondiscriminatory access fair payment for performance for service and so on and the really fascinating part of this is in the future you're going to have utilities, your local utilities have contracts with all the micro grids in your neighborhood a lot of places are going to have several micro grids in the town in the city or whatever and at any given time that utility can in an emergency tree comes down or something like that to assume any number of different profiles so one micro grid they might say island cut off all load we don't need to have that interaction another micro grid they might say wait in five minutes I'm going to ask you to export this much power to your substation another micro grid they might say export but this much of your export lead the frequency signal and other micro grids they might say okay the grid around you is down I need you to spin up your frequency and basically come up to grid edge standing right synchronous so that as soon as we throw the breaker there's not an impact of you coming back on the system in other words it's kind of lets them send less power to a substation to bring it back up because that substation doesn't have to pull off the load from the micro grid the way it does everybody else when it comes back online and so the future the smart grid is all of these dynamic flexible assets that are highly dispatchable into multiple different markets that can get called by the utilities and emergency conditions to essentially self-heal the distribution and that's really what is kind of the cool future on how this stuff is going pretty good so I'm sorry I need to I'm okay um tighten up on Brian okay okay so actually we're just about at a break point um and then we're going to ask when you come back um do you want to can you it's about uh okay and then okay are you gonna come back with uh can you come back with the MIT student your hacker if you can okay tomorrow's my so when you come back like get ready to jump on a team exactly okay thanks Brian um so so let me do one more sleep before we we um start to wrap this segment um any other questions or comments from any legal entities anything from non-legal entities objects toasters I think program you ran all I'll just point out the DLA that you know with a few tweets to far um and in particular some of the you know the stem stuff model agreements and around utility energy sources these things this model can get begin to get adopted by the military and by having that third party operator and so on assuming to pass all this security uh you know dynamics and so on um you know that has a third entity doing the financing of third entity selling the products and goods and services after the market and so on so that you know you guys don't have to you know run a fowl of any of the rules that's alienation and so on um the the key thing that we notice is that you know the tweets don't allow you guys to go further out the term into those grants because longer terms often underlie people wanting to make these big investments in you know substantially sophisticated microprints um that you know once I invest and I spend you know 75 million to build it I want to know that I'm going to be allowed the rights to operate it to recover my investment you know 25 30 40 years um but if you guys could use um you know if you could lock in you know special service and a bid agreements for you know you give a utility energy services agreement to a microgrid operator like say an energy comes in to build it and develop it for you um if you were able to uh you know agree that when that term ends and a new one's established that they would be in a position because they own the microgrid infrastructure you know they're that you know you guys are either buying out at that point after good appreciation or you know you agree to re-up with them because they are in a unique position to soul source given you know what they've done that what they continue to do you to kind of do that um and that that was one of the messages that we got across which is that you can you can be more resilient pay less from a levelized cost of energy if you go bigger and adapt more substantial and robust systems including sending tendrils off the microgrid in the base so that the first responder center the gas station locally. So I think that's one of the things that I think is really important is that you can be more resilient pay less from a levelized cost of energy if you go bigger the gas station locally stays up so you can keep pumping for the vehicles you know and stuff like that so there's um Do you perceive different profitability standards in the future before the different customer base like a business investor base military base like a commercial base residential base in the future? Yeah I mean the the economics are running better and better I mean I can't I mean that excel solicitation that just happened is an example of where you know you have the economics just getting increasingly more attractive I think that um you'd be very surprised if you offer you know if a microgrid concession agreement for a base to provide energy services for an energy developer on like a 30 year or 25 with a re-up for another 20 years how low those bids would come in it would really be you know substantially impactful I mean just to give an example right now I'm seeing developers fight on deals and you know agree to outlay substantial funds for development based on pricing dynamics where we tell them that they'll price ceiling for what they basically floating with their local utilities default so whatever they would just pay had they never signed up for anything other than just using normal power to their local utility creates the ceiling on what the microgrid operator is allowed to charge the customers on the microgrid and even with that ceiling we're seeing microgrid operators feel very comfortable to you know to take that at risk mainly because they do the not the commodity charges but the demand charges for utilities going up in the future as they transform less from pipelines more to platforms and platforms are more about the types of value that's you know manifest into ventures can we talk a little bit about like Mr. D'Andre, do you mean to tell the privatization program that they have that kind of program is great and I would just encourage you know people to begin to think you know in an integrative fashion about this I mean a lot of the procurements that you I mean one of the issues that you guys have a lot of times is the term of the procurement makes it that sometimes pricing and technology I mean for example the bids we see and so this station is now are kicking the butt by like you know 12 cents bids we saw last year in some places so the pace of technology is especially around battery costs and things like that are really coming down to this seriously. Did that sort of got the economic question about residential? Did that answer the question? Oh that's great really great. Any other questions or thoughts? They recently mentioned batteries and my understanding is that one of the things that makes energy markets different is that it's all there's no ability to store energy at load so now but there's now there's like power wall and things like that are now energy can store it or passers can speak to like any of these technologies for storing energy for a future of well the most obvious one is actually one that we're all used to you're sitting in a battle right now this building is a thermal battery and any building that has decent insulation is in itself a thermal battery which is why moving the thermostat up and down and so on can do that. I have a client that has just I mean there are ours off the church now I mean I think they recovered their investment in like two half years something like that they just build a big thermos and I'm serious big thermos half underground half above ground and with powers cheap you make chill water when power is expensive you use chill water and that simple arbitrage in terms of them being on a time of day rate you know even around their demand charge and similar in the basic time of the simple kind of user in this case allows them to do that so all of our buildings and this is why we have demand response markets and so on all of our buildings themselves are thermal batteries we event for electrical storage you know power wall those are great examples our entire transportation fleet is going to be a battery in a few decades and you know are going to be able to you know you know imagine charging networks to be able to reverse stop charging all the cars up to the chargers for like the next four seconds and then they deploy a fraction of the battery charge based on all those batteries in their cars back to the grid to balance the frequency signal and then immediately flip back to charge from the back and then the people in those cars get paid a fractional differential to delta between what would it cost to buy the power versus the value of selling it back in that flash of a moment in time and so battery costs have a lot to do it that was really the most unique thing about the latest excel solicitation by this big Colorado utility was that the you know the solar costs the wind costs for like the solar and wind you know wasn't too much less than last year but the battery costs went down dramatically from last year and you know the people who were starting to give quotes around flow batteries as was looking at my own are really you know that is getting indications that those are you know begin to rule in terms of cost and if I need something they really have great potential okay so I want to do one little wrap up of three or four concepts that we can ruminate on then take a coffee break by a break and then come back and then we'll we'll break into teams and we'll do some modeling we'll be iterative right so I'm going to do it I'm going to I'm going to try something a little bit fancy so hopefully this won't not work here we go here here okay let's see if we can oh my god it's kind of working alright so awesome could you check to see if we can we are great okay because this is an environmentally friendly class you might need to jiggle the issue I can also it's good really? do it check all just hold it like that still good? alright tone is a little bit more healthy okay then is that right or is it unhealthy? it's going to keep you okay alright so I want to first of all show for those of us that aren't familiar with these I want to show three things for modeling so we can get a feel for some of the things that we're about to draw on and then just do a quick round of some of the concepts so this is a kind of a use case it's a UML use case unified modeling language this is a classic classic I just got it random on google a classic type of use case where we have some actors and some actions so we have a registered customer a new customer and I won't go too deep but they view items and so the most important thing you see how there's our box here the box represents let's call it like a reference boundary or like the scope of the question so these can be very broad they can be very painfully granular and small and narrow this one is the of an online shopping system like imagine amazon or even a variant of ebay this is more like an amazon the shopping cart kind of metaphor so you can view items make purchase check out client register not sure if that is in this context so we take the first three it's a pretty definite flow here and then the arrows are doing irregularities maybe you have to understand why they're doing it but typically you'd expect to see some back and forth back and forth between view items we would say like add items to shopping cart would be slightly more modern when we say that and then at some point you would do checkout and then there's a purchase flow off the side and a lot of people spend their whole life just in the purchase flow like that's all of the use cases that they do in their companies if we did a much more granular breakdown we'd have a whole thing with the orders and receipts and the back and forth and tracking but this is like I'd say a reasonable level of altitude to just get an appropriate engineerable squib on an e-commerce purchase over here we've got something that's happening there's a service here and it's authentication so there's some for use in your password there's an identity provider there's some oh they do say there's a payment service talk about PayPal by name in this case so these are other actors you could say the authentication service probably built into the the system here it doesn't have to be if you have an external identity provider for this person it could be Google or log in with Facebook or something that's one way to do it it counts to the system here I noticed the identity provider is going to checkout into view items not sure exactly what that's about but we can extrapolate reasons why they're doing that payment service so this payment service is probably something like a point to sale or like a the payment processor services that has a credit card and PayPal is a specific it's a specific payment method with a company the service maybe provides five or six different methods potentially so here we have like it's not perfect but it's actually not bad just for literally the first thing I clicked on for use case so you can imagine I would call this very much a business use case for a shopping cart system is what it seems to be we just so I'm just going to randomly click on two or three others user publisher author so you can imagine the author is I don't know like Brian from Thompson Reuters doing like a data science project I have looked before the user would be probably me that'd be the first buyer because I would like to read this book publisher, Amazon to make it to Kindle Kindle copy okay so we have kind of a flow there here's like a this is a classical and trading enterprise person the actors is some like user there's a manager user create users, read users delete users, update users this poor person is going to admit somewhere obviously and they have to admit something we should have a lot of them a lot of slack because they have a hard job but of course holding the stage and now we have oh hello transfer a court case to the company register the court case, manage the case okay I'm not sure what that's all about I think I put in legal use case to see if something comes up still not much comes up here's a bunch of use cases okay so what I want to highlight here is part of what I want us to do is to when we're doing some use cases to extrapolate what we want to work on I think some people may want to do like TMA you might want to take on Michael Casey's case because I want an internal advocate that's heard of it before it's sort of like write the use cases some people might want we may not want to do like a DLA case by name we may want to do some other kind of case that's more abstract or maybe we can do a commercial case that you can help us walk through we could do people want to do a different sort like I know you've been working on stuff Ryan and insurance industry other things we could absolutely do we all don't even have to do micro grids but let's just say we did micro grids you might but now imagine said micro grid it's shopping cart for a moment what I want us to do is write the actor and the action three ways and I'll do it with this I want the business role this is the business role it's a regular customer how do you know it's a business role if you talk to the CEO or the CFO or the COO and say what is this arrow or a certain stick figure they go oh that's the customer they probably say that but when I'm listening I want to talk to those people and I ask them and I draw them pictures and I ask them what they are and I notice that they're all saying that's what I write down and I call it the business role it's what the line officer could say it's what the oh thanks good call you are a good camera operator thank you thank you very much what this is awesome oh I know what happened one of the pictures yeah of course let's do that for hours make some of my slits oh we'll wriggle the slow wave yeah you'll see it the poppers in our award winning slow wave so actually I am going to show this for a moment I'll just describe it so basically so business is customer this is called a register customer let's just say customer we'll have to keep this dense simple to make progress in a couple of hours so customer we'll roll oh that's interesting so let's just postulate that this is like the sale of a book perhaps Tom perhaps the Tom like Brian's like soon to be award winning you know like book now we have I want to say if I want to know what is the prevalent legal framework that we're operating within we could talk about this but I would go article you know from article two and I'd say sale of it's okay and you know there's multiple legal regimes that apply in different ways but if we were then I'm not going to put a label on this person because most prevalent relevant context I want to say consumer merchant consumer you know if you have the definition section read how article two comes together consumer I'm going to pretend all of this I'm going to concatenate it for the moment and into like just the online shopping system provider and I'm going to call them merchants that's the legal entity on the other side just to have a simple system for a moment I'm not going to go to all the partners and the payment system and the payment processor and everyone else let's just say on the other side I would if our use space was one of just looking at the user flow through a shopping cart and our relationship with the buyer I'd say merchant the legal thing is merchant from my perspective by the way from like a lawyer perspective they'd be client actually but just in terms of modeling this system to build it the legal relationships that you can model on layers is merchant consumer that will tell us a lot like water to merchant ability ask a bunch of good questions here now there's also a technical dimension a technical dimension this person would probably be user in 9 out of 10 systems the end user something like that right not necessarily you know it could be something else but and this would probably be like the system that they're operating within so it could be our like inventory system or you know it could be actually somebody help me out here is anyone done a shopping cart any time ever yeah shopping cart system or platform well anyway there might be two or three major big marketing systems we'd have like our user data we'd have our user data based authentication service we'd have our inventory and our like catalog kind of system something like that we have some sort of like payment process payment system for sure and then we have some sort of like transaction processing system it keeps tracks of like each of our customers ordered so we can do different analytics on that kind of pump out and receive that kind of stuff so let's just imagine that like inventory systems and the technology person would almost certainly put those that's what they'd be looking at and they so what we can do is and so over here we could say like make purchase like a check out let's say like check out if we just focus on that it would be the business thing we would call this check out that would be what the business person says the legal person I would say purchase of goods purchase of goods article two transaction I think that's literally what it's called and then the technical person might actually also call the check out it depends on what they're modeling so frequently I've noticed when I when I kind of do three words under the afters and the actions for business legal and technical very frequently this is normal and this is good actually the same word is like very frequently the business word and the legal word is the same sometimes the business and or the legal word and the technical word is the same like check out would probably certainly be would probably be what the technical people would call it and what the business people would call it like if you look at their schematics and we just talk to them over lunch and say that's the check out action in our use case we call it settlement we might call it purchase of goods if we're looking at the transaction part you know um but so so sometimes the legal transfer title transfer depending on what we're looking at but that's why this is good so like when all the words kind of line up that's fine what's interesting is when you elicit the business legal and technical words and they're a little different that's why I'm recommending we bother just at least asking and quickly putting down the business legal technical role and action because when they're different we want to note that and say oh like there's a name for that and that means there's a whole frame of thought around it and we can actually look at the same stick figure in the same arrow and capture what otherwise could be weeks or months of meetings of people talking past one you know what's happening and so it can be an easy way to just put like these basically I just like pile up the names up in the same state frame David? Yeah, so I got the example of the business role with the customer we rolled the sale, the technical role would that be like Amazon or like the interface yeah Can we talk about like a web portal? Yeah, yeah So are we identifying these interface points for each actor? Yeah, let's break it down and so we'll talk about it for when we get back from the break we'll figure out what we're hiring specifically doing it for a micro grid when I would suggest we do it on a high level in order to get to after the break I think the most the most interesting thing that we can make progress on is an algorithm that is the contract in a sense we just postulate it as the contract or at least the mechanism Sure Let's call it the contractual mechanism and the method by which the contract expresses itself I mean I have no problem with there being a PDF representation of it but the third point about the UCC and you can apply to it if you do achieve a contract via software where the software demonstratively has all of the key elements that you need to have a contract and so on but you don't go further as we do almost all the time in discriminating certain warranties saying that certain areas of law are not going to operate and so on and you find yourself with the most core of the basic legal deal but you then are going to be subject to whether the common law is in that area as to how any other more complex things or situations result would come about so if you don't put it in contract the law will fill in basically a default baseline for your contractual relationship between the two parties that will be the universal code and common law Can I erase this? Can I erase this? Okay, great so what did I say? I agree with what you just said and I guess what I wanted to get at is if what I want to suggest we try to get to is for computational contracts which is kind of like the session today is that we get to a process that does this I think this is a real good one, it's generalizable and so with that in mind here's kind of like a level of abstraction that I think we can use so that we can start to block some things and start to model some stuff this is like a classic template to start like kind of get you started in a use case and maybe it'll be just one sort of whether it be three or four or five so I would say if we're doing, let's say we're the lawyer on an engineering team or we're CTO and also that part we kind of do merge unit of like legal and technology of the future like and we're sketching out what are the schematics and requirements for the system that we're going to build so we'll look at it from that perspective for a lot of engineering perspective we might say okay this is the we're going to call this person a customer he's the commissary on the basis we're going to call this the LT and this here by the way we're going to say this is the actor we're going to call this the action legal would be let's just call it consumer for our purposes and then technical might be very technical with the user especially if they can also like like at the commissary and there's an app for that the user is very typical the use case might be sort of like I'm just going to say I'm really simplifying this but like shop and checkout so let's say like the business action would be checkout the legal might be purchase of goods which triggers actually a difference in rights and obligations between the parties and like you would be deconstructed it might be what we're zeroing in on purchase of goods license of digital information and then the technical I'm pretty sure at least on teams it's been years since I've known one of these usually called checkout also or you could be like transaction process it depends on what the team is and what you call it but the technical people will call it something like here's the insight and what they call it you put here like here insert what the technical people call this how do you what do you mean well draw a stick figure and a circle and then say when we say checkout what do you call it and then we'll say we call it the missile command subsystem for authorization and verification and then write it over the acronym and so now what we get from this is we can actually begin to have about like we can begin I'll tell you what we get we get number one we can identify and we can align we can harmonize and we can integrate and I'm speaking now very unhappiness and talking like right out of the pages of consulting so we can identify what's going on here for like a new system I don't know maybe it's a kind of registry maybe it's a maintenance system maybe it's microgrid maybe it's your dream system and then you can align so what align it means is in the beginning when I talk to people about stuff it may be that business people have like a stick figure a stick figure the technical people have had many meetings about this and they're looking at using this new technology framework there's actually like three stick figures there's four stick figures over here because one of them is like the sub systems in the x market place of the thing that we're using or they may actually introduce additional players doing some things the legal people may may not be aware of all the stick figures or the legal people may assume that one of the stick figures is going to be the title of the journal obviously because you can't come wait everybody knows you don't complete this until there's that but the business people may not have those stick figures they may not have those steps so the first thing we do when we identify stuff is we can align it and then what I used to do in the old old days is I would have like a rice paper or draw one and I would draw like the business people in technology with this rice paper holding up like a lamp and be like I don't do have the same number even of something like and then sometimes there'll be lots of these things but it could be very different if that's their conversation with people we realize oh you have three things here which is like review goods sort goods select goods quick goods here like but the other people just have one circle which is called shop or whatever they said here so we can actually sometimes collapse and just and find the same level of traction but other times we talk about different things literally so being able to enlist it and align business people and technical can be really quick way to not dangerously talk past one another for too long and get anomalous results when any of your efforts too late and then you can harmonize now there's opportunities to actually do like process re-engineering a little bit to cause things to become faster cheaper better to actually take some what not just the drag of the law but the wisdom of the law like maybe you want to title insurer here maybe you want have a step where you give people an opportunity to not buy before they buy because I will overall reduce the number of charge backs or something or whatever so like we can actually form the wisdom of the law rules we can end up avoiding a legal regime that is too cumbersome we might want to identify a few of those things that are good best business practice something like that and same with technology it's a lot of magic you can do a technology that may not be required or expected for the business or the legal people but once they talk to the technologist we discover there's also these almost seemingly capabilities of new technologies that some of which we don't want the tail wagging the dog necessarily with legal and technical driving the business in my view I think business drives legal and technology you know from a man perspective but you could apprise the business people the legal people of new technologies and they seek to adopt some of those at that time they might not have been aware of them and so there's a conversation that happens and that's when we finally can integrate so then at some point you can actually send out an integrated system where the contract it largely occurs through processes you know we could describe that solely in a like written for pirates and in parchment and everything we can do it in pdf, we can do it in microsoft word but you know the corporate thing for a reference in supply chains and other things like the contract assumes and we can describe it in the corporate reference anti standards or agree tax we can use the grid algorithms and models I'm seeing this increasingly where we reference it and we say the grid model will be the then current version in github as part of our continuous delivery thing and that's what we all agree the profile of a piece of software patch is going to be like so there's a lot of different ways to to identify an algorithm or a process and actually cause it to be part of the contract in a useful way and to set the rules around what that's going to be but basically to have well like literally in the microgrid this tells you what the transactions will be oh yeah well it sets this yeah I think so it is possible for all these things to be talking about the same thing yeah and actually before we go forward just to make sure we get David and then you and then you so you said what is the Amazon and you said what is you had a list of things so in my head I was thinking customers shot a book on Amazon so if this is rules for customers we will all be the UCC sales goods over and then the technical rule will be the sale checkout on Amazon you would actually wouldn't be the UCC or it would be the terms and conditions that you sign up for okay there you go the UCC recognizes the contract will control any event that you don't have all the terms of the contract and it falls to UCC so we get one at the same age and actually can will you defer your next so I just wanted to put if we don't need a fourth actor Eric ordered whether or not market as a system should be another actor I'm so glad you said that what are you shopping for and how is it pricing that's kind of that to your point with the market actor the markets are yeah so I I promised you two things this is the second and well I'm sorry that's finally I'm looking for the highest and best use highest value for what I can sell I promised you two things can you see this pretty well are you talking here basically about using algorithms to evolve and optimizing reduce process gates so this is let me show you something first to answer in a sense what you're asking is could the market be an actor let me just answer that straight up and you're going to love this we haven't had a chance to talk about it but prepare to be delighted it's so much more how about a system that you can build dreams right a system is totally type of an actor and it can be so I want to show you this because of this obsessive like focus on the law through this course so a system can be an actor is like obviously an actor from a technology perspective what could be more of an actor than a system in most UML diagrams when you're sketching a system like for example we're about to hear about scratch blocks when we come back like when you draw system diagrams a lot of times the client and the browser and the server and the service are all actors right so it's like from a technology perspective it's almost like it's unusual not humans as actors it's very different out of the system and the market is an actor but from a legal perspective I want to point something out so that we can align things I think more efficiently and make more progress faster as a team whatever teams that we're working with so this is I would say one way you could look at a commercial system do you know the seven layer who knows NSI seven layer stack anybody really seriously OSI excuse me yeah OSI okay thank you all right you must do you know the OSI seven layer stack oh man okay so in the day this was canonical and as a conceptual we understand you know networks and so the NSI seven layer stack is sort of like the trunk layer of like the big pipe and then it's like the servers and then the like no platforms and applications and then like the the platforms and the applications and then the display that the user sees and then the interaction point like that you're clicking on or keyboarding or something in your terminal it was that kind of stack and it's just a very very awesome way to understand the whole computing environment as a stack and to know when you're on certain projects you work on certain things and what layer of the stack are they offering the hardware layer and software what part of the software layer and it was and what's interesting is almost nobody literally built their things around the OSI seven layer stack but it was a conceptual framework that really was huge I think it clarifies a lot of thinking I still wonder if people talk that way when we're just calibrating what we're talking about the implications of where it fits in the big picture so coming out of the 1990s and the emergence of the web and people starting to transition our business interactions to people wondering like how do we know what's happening and what fits where and what happens in a group of people in a organization called CommerceNet and over some years they came up with this concept of how you could look at transforming a business large to the world of the web and so they say well at the top we can imagine a big network maybe that would be the internet today or maybe it would be like .mil in an app or maybe it would be you know whatever the highest level network is within which everything happens inside of that you can say we have a market okay so on the web we can totally say that we have any number of markets that operate on the web solely on the web we can say Swift and chips and Fedwire and other things are markets that operate on a big network that we can call the global payments networks something like this like you could say that now but you can also say we have and then within markets we have businesses in the markets businesses have services services have or contain interactions to your point about interactions so I was like oh I'm going to show this like several layer thing tomorrow you know if this is all about e-commerce it would be this would be transactions but interactions is a more elegant way to say all the important things that happen like when you log in and become a customer of the site that's not it that's more of an interaction that's very important they send the 90s documents I'll forgive them but why don't we call them records we'll say it's a record now that would be more of the current like the current way to look at it it's more electronic and records contain let's consider information items let's call it data or structured data structured data can be encapsulated records we can extend beyond those records are are exchanged as part of interactions and transactions transactions and interactions occur really services in the bottom line that's how we would think of them and services are operated by businesses and this is where we get a little bit legal up in here like especially so so we can imagine a legal person it was like what was the appropriate high level wrapper that Chris used earlier but like a let's just say a legal entity would be how I want to really think about this from the perspective markets now we ask okay there's two kinds of markets that should say for purposes of today one kind of market is the kind of market that's a legal entity and the other kind of market isn't okay let's just say that and so the kind of market that's legal entity is your stock exchange right Chicago commodities the kind of market that isn't is maybe like what is the market for babies perhaps or for um socks anything over the counter any over the counter yep yeah it sounds like you're partaking lots of we have like your labor statistics and other people will talk about like markets but there's not a boundary condition it's not a legal entity it's more like the accumulation of lots of transactions of a certain type that we will call an open kind of market sometimes I don't really have the language for this I'm dying to meet the Sloan or other person that can say oh the words for this are I don't know where it's for it but I just know from doing this kind of work that there's some the kind of market I want to focus on for today is the kind of market that's a legal party if we do that then we can say the market is an actor that to do to do like we can assign a name to and we can give them a business name or a legal name and a technical name I think that's delightful now we can make real progress because what we can do is we can contain like put in a box in a use case a scenario in a buildable schematic a blueprint we can encapsulate the complexity a block and then we can outline and harmonize and integrate so much more the business legal and technical dimensions of the interactions that are happening and we can even start to tune what those market conditions are to optimize them based on merit order algorithms at a higher level nature than the ones that are maybe composing the price points at this level technically a lot of markets operate as a central counterpart where technically if you buy and sell on exchange that's not an exchange between the person who is selling versus buying each of them is doing a deal with the exchange the exchange is the central counterpart which is great so that would be like point like so we might even want to maybe model we everything doesn't have to model one thing by the way we could we could rock out two or three modeling that's actually very interesting in terms of creating a bit of a library of like legal primitives of like the basic design patterns and having like the market be an entity for transactions one that I would take off the shelf all day long and slot into these kinds of diagrams I'm glad you said that is there anything with the LEIs legal entity identifiers Brian yes that's correct could you extrapolate upon this critical identifier of legal entities because we already talked about this are you mocking me or what I'm saying is I'm trying to set you up in a host of a TV show kind of way because we're broadcasting what's your LEIs a favorite point question get that info actually I'm glad that you're saying it because what we're going to do after short break is going to start modeling stuff and the names of like businesses are going to come up and people are going to say stuff like acting corporation but is it like corporations ID is it the tax ID like how do we lock down a unique identifier for these businesses is going to be absolutely critical on the tech especially the technical dimension of the of the name that we ascribe to the entity that's a business and so that's been a tangled mess and what I would because you know more about legal entity identifiers than I do I was kind of in my hand handed way asking could you please describe them cool yeah no I was going to talk about the whole legal entity identifier entity identifiers in general yeah and their importance tomorrow but I will maybe like this part yeah so so after the financial meltdown of 2008 some I forget which international on you guys found some yeah I think it was yeah that's right which impacts the stands for financial accounting on something or standards so they said you know look one of the problems here is that no one knows who's dealing with boom and you know you can unpack what we're all this thing these things are going and part of that is you know there's no there was no standard way to refer to these entities so they set up this system of legal entity identifiers in which different organizations can become legal entity identifier mentors and so they like sort of like becoming a notary because you have the ability to mint new LEIs which are 20-digit identifiers and they essentially are you know done some something about their public they're self registering and they're increasingly being required to use in transactions so in the new method two regulations that just came out that underlie various kind of transactions require that every party in the method to comply in a transaction has to have an LEI so that sort of thing encourages that everyone wanted to get an LEI and use it now they're also some of them are people who are making LEIs more sort of web friendly so they're making them web de-referenceable so if you want to know I know that there's an organization that's doing that that's turning LEIs into URLs and so you de-reference the URL and you get information about who's who's behind them Times and Warriors also has a system of identifier of perm ID and there's a site called permid.org and we provide more information about more organizations because you don't have to register for your own LEI sometimes we can just assign one to you and we make that system of identifiers public we provide three and a half million organizations and they're permid.org information free of charge for anyone who wants it in both tabular and link data format and in addition to this the LEI people provide links to officers and drafters of companies industry codes so more stuff that you get from LEI for more companies just saying that's like bucket loads of solution and then we link to LEIs within the data so if you know a company's LEI you can look it up on Times and Warriors through its LEI and get the perm ID record or if you know if you just want to look things up by name you look it up and it will tell you the LEI is that open is that part of your subscription services that is all free I don't know how you share the link that's awesome because sometimes all I have is a tax ID number and we don't know if they have LEI per not just for your trust do you roll the SCIC codes in there yes ern.id right PRMID permid permid.org oh yeah so you know what might be cool let's see what we come up with when we do a little bit of modeling today learn how to do it and calibrate but maybe we can I'm never happy until we click the button and stuff maybe one of the things we can look back for one or two of the teams being able to check the idea of business is useful get a token and look it up to the PRMID service I'll do one do you want me to give you my update about the block 1 wallet let's get the update of the wallet and then we'll wrap the segment we'll get you a code name run and a few other things and then we'll come back and do a little bit of modeling okay so if you look at your wallet so I think that just a wallet do you want to open your wallet I do sounds it's a big ask but okay there it goes hopefully hopefully the cat transaction flows here here I heard a couple I think I timed out did I time out? okay so I'll log back in for Stronghold for those wallets do you guys provide any type of you know you know so we give you the code the sequence to regenerate your wallet if you lost your code the single key single factor it's like that code from the importance of being earnest to lose one parent is unfortunate but to lose both is just being careless and again that was when I talked to people about why Ripple Gateway one of the main things that kept coming up and the people who do set them up they treat that at key it's like the trade secret that cooks around they under lock and key multiple saves five factor identification you get to the key yeah exactly so someone I was interacting with if the Ethereum coins that we were getting where you could trap cash them in to the way yeah yeah I mean that's the question without any market control these exchanges volatility is the game so do you all transactions do you want to know what you guys do I want to broadcast this screen are we doing that are we doing it or not it's not a video for you actually purchase I think you need to change it okay thank you thank you so we click on does anyone remember what he told me to do yeah you all do okay no problem I'm sorry that we you two should meet can you exchange information please so what do I do Brian you all transactions the page is that thanks okay so now if you so hover over confirmed here so you'll see that you get the block number and the number of block so that's the number of blocks that you are away from the block so things turn confirmed it seems when they're somewhere between I'm not sure 10 and 20 confirmations in okay so then unhover over that so then now you've got this other transaction that is not it must not be 10 so you've got this other transaction that's unconfirmed so it's you've got a block number here and it's got 12 confirmations yeah so it must be I think then 20 confirmations that are required for this to turn from unconfirmed to confirmed so by 20 confirmations the consensus algorithm right is what he's getting at so the consensus algorithm here is maybe 20 consistent confirmations and then and then confirm confirmed and that's when it becomes perhaps like we say in the contract that it is legal enforceable online or we have someone like to be president if you're so surprised well it's well it's valid it's on the blockchain but it's not so it hasn't been agreed to enough times for this status but this status is sort of outside of the blockchain's protocol it's on the chain this is just sort of artificial status but does it attain the legal status of well it's a good process but just it's a good process it's a good process it's a good process it's the same it's the same it's all about it's all about it's all about it's not about the cycle hey come on up show it yeah do you record what are the interesting things is that the speed at which things progress depends on whether it's just going to... Oh, how do I... how do I set it apart? You know, I've sent money to... How do I set the file? Yeah, yeah, yeah, I've sent it around and we've been waiting for the long entire time we've been sitting here and they just went... I've changed my name to like two blocks and probably some of what we're about. So there's just not that much activity. This is based on switching with also this particular change so I think that probably helps. I'm not sure if you might be the only people who do this. Yeah. Is there... Based on a number of people who... It's so long. It's just an ad, yeah. It's just an ad, yeah. It comes down to... to direct it out. We got to do chestnut. Yeah. Chestnut. Oh, here we go. Oh, is that... Is that legally enforced? I don't think so. I think so. I don't know. But we can draw from it. I mean, I spoke with this class and I think there's some extent I'm just going to like watch the content and let the identity really, you know, heavyweight experts that you have that come to the writers. I know. But just why did that? Is that they... I'm at a wall where you can compose a network, a transaction or some network, and you can just almost set the rules that are appropriate for your network. And then you could... No, it's going to be a transaction of 20 or it's like two not 20. But then you can even say it's legally enforceable when or if you want to get a certificate... I might set the actual person. It's legally enforceable as soon as it enters the first letter or something but you still get the benefit of the dispute resolution and the liability cap and some other stuff until it's been confirmed by 20 out of 50 of the like four members or stewards of the network or something like that. So you can start to actually sculpt the legal parts of the project. And you can use the best stuff to sculpt these. I'm just going to reflect it in the wall a bit. The funds are added and subtracted much quicker than the things that are reflected in the episode. The balance that you're having on water is... you know... There are some degree confirmed towards that proposal. It's helped to be able to forensically determine that the blockchains... is an internal employer's build of the area blockchains. It's not unlike the public authority blockchains. What we're seeing is the issues when you have a intrinsic embedded clearinghouse in the whole process. Not a separate clearinghouse. So this is... when I did the blockchains overview that we discovered at the festival of the thing, I showed an abstract version of the functions like here's a hash, here's a block, here's a this, here's a that. This is what it looks like in its mature version. So if you were looking at... if you were conducting transactions on Ethereum, the Ethereum public blockchain and you wanted to look on the ledger to see a transaction for some reason. You're doing a accounting, a bookkeeper. You just want to know how much I spend with this person last year for some reason. Do they get a discount this year? You can now actually pull up this thing called what's called a explorer. This is a blockchain explorer. And so this is... so... David? So... because we were going to get into the testnet, we're just going to go for one of the transactions that came through on Ether scan, which is a lot of work. And you can see... oh, that's a lot of this... 64 Ether. 64.43 So that's nice. And so you can see the transaction cost, all these things and sent it, who got it, and then you can even sometimes you don't see the comments but it's fun. Because of the nature of Ethereum, the one-way nature, it's a very good idea to go ahead and if there's an address that you are suggested to send your Ether to, it's often a good idea to put it into Ether scan to check it because sometimes there are comments like this is a scammer and you shouldn't do that. So... pretty handy. That's a good idea. And extrapolate to things like and the convergence, I think the part-sighted convergence of blockchain technologies and legal entity identifiers and business registry type identifiers at Topson Reuters is making available with perm ID. It's interesting to imagine ways you could extend that capability by allowing further annotation. But can you go back to the transaction block? Like one day, I just want to do a semester on e-transaction. What's block height does? Is that just because they vision the blockchain building on vertically instead of horizontally? Yeah. That's what I call they call block height. Yeah, I was going to say... So, TxHash this is the remember how we did hashes? This is the SHA-256 secure hash algorithm 256 bits message digest result from hashing all the data in this block. It gets you this. So this becomes the check sum for the transaction hash. Excuse me, not the pull block. Here's a receipt status. So we have a status receipt success. Block height Actually, the truth is I'm not exactly sure. I know if the height relates to the up and down versus the Y. Exactly what I think this is how many transactions are in a block. I think. Do we want to click on it and see what happens when we click on it? I just wanted to talk through it. I'm more familiar with the Bitcoin block and the Ethereum block. I'm hardly expert in this, but just look again. I think it's worth taking a moment to look. You have a time stamp and that's UTC. So that's nice. That's part of what there's consensus on if I'm not mistaken. You have a from. This is a, I believe it's a hash of a public key that relates to the user who's transmitted or the pay or of this transaction. You have a two, this is the pay that the ether was paid to. So if you do what I realize is like when I think about infrastructure for a phone book, I would like go alphanumerically or something like that. In this case, the only way to do is you copy it you do a red check, you just do a find for this unique string to get to the address on the blockchain of that party and to look at all the transactions that they've conducted from. Bless you. So that's kind of how they literally do that. The value the nonsense is interesting. Do you remember nonsense? Sort of, yeah. Okay. In quick data. So anyway, it's not just like a quick run through a block on this particular blockchain on the side, the theory of blockchain. Bitcoin is a little bit different. And if you structured a blockchain for like defense procurement or if you structured one that was like gain prominence in like an energy market, I think the block might be different. Like I'll bet you if you did that on the transaction level, we'd be talking about like how it was like BTUs or whatever, or you'd have some kill one hour or so. So like you would, so you kind of like structured the transaction really wanting it fancy, everything energy can be reduced to jewels. Yeah, I thought it was BTUs. And you structured the transaction data around it and maybe even like what, you know, which like whatever option under the master contract they operate under, who knows what. You do it so that so that you can get the auto magic like walking onto the ledger that reflects and can also assist in meavering or triggering legal events or other type of notices and things, the whole deal. So this is very composable. This isn't like what the blockchain, you know, from the tablets coming down from the mountains and it has to be like this is very much something that we can structure to support and reflect the business that we do. So any questions on any of those rudiments that we learned? So we heard about computational contracts and we saw the light about merit order processing that basically effectuates our contract in a way that is computational. Thank you. And then we heard about how to do and learned a bit about how to do a use case and how to we didn't go too deep but how to do a swimline diagram. We'll pick that up when we get back. And then we saw a little bit about how to just can think about in a system like what's like the market or the trick like the big level thing. What is the what are the businesses? What are the transactions or interactions? What are the documents? And what are the the records, let's say and what's the data running inside it. By the way, this is a record. This is data. The blockchain, I also call the record it's a superset record of all the blocks and then individual block and interaction are also records that are nested. This is data. And the businesses here would be whatever the two are so they may be individuals in this business climate and then the the market place would be it's not but it would be Ethereum public blockchain. It would be the rough equivalent if you had to assign like a role in the static everything I'd say that's the market within which businesses or like legal parties that are businesses and or individuals well that's not a question. Is it the network though? Is Ethereum the network and our market place is still on the network? So that's the question. I think a good way to legally hack this or to legally engineer this would be to answer that question and so like Chris said it would be the network upon which the blockchain operates. We're just a nested ledger. This transaction could be someone from an exchange transferring something or it could be something between two parties. In our case it was two individual parties. If it was an exchange then that one would show up because the clearing would be inside of the exchange. And so what we can do and again in case to add the seven layers I showed you are a conceptual conceptual way to think of it in reality it's like probably three four or five layers or something things are collapsed or really disincomplex ones. It could be like ten layers because for certain engineering or other reasons like in the credit card networks it's actually incredible what I did a payment thing. The complexity there but one slots in there they know their role, they know their lane, they know their inputs and outputs but these things can get more or less complex. So what we can do is now we can start playing with some good example scenarios of engineering approaches to structure transactions in ways that are buildable and we can test them against success metrics like business success metrics legal success metrics we get predictable legal results and technical success metrics performance or interoperability that kind of thing we can sort of see the flow then that's a fun time. So I see that we're 440 very nice to have slumped over no one's under the table yet that's good. Thank you Mr. Bob. So what I'd like to do is wind this down where are we? Here we go I want to thank everybody out in the internet land and say that we'll be back on line tomorrow at two o'clock eastern time I think is when we should plan to get back for purposes of public consumption but until then track telegram if you want to play along with what we do between now and two o'clock tomorrow and look forward to seeing you then.