1. Blockchain Technology: A New Approach to Provenance
Presenter: Nelson M. Rosario
Principal at Smolinski Rosario Law
Adjunct Professor, Illinois Tech Chicago-Kent College of Law
Visiting Professor, IE Law School
Date: March 12, 2019

2. What is new here?

3. What is Blockchain?

4. The future?

5. The future?
A scam?

6. The future? A scam? Magic Internet Money?

7. Blockchain technology is mainly about one key principle….

8. Blockchain technology is mainly about one key principle…. trust

9. Blockchain technology allows for a new way to manage
trusted relationships
without using a central counterparty

10. Now we can trust that information transacted on a network
we do not trust has not been
tampered with

11. IT ALL BEGINS WITH BITCOIN...

12. THE DOUBLE SPEND PROBLEM
HOW CAN YOU BE SURE THAT THE DIGITAL MONEY YOU RECEIVED
HASN’T ALREADY BEEN SPENT?
TRADITIONALLY BANKS PROVIDED THE SOLUTION
BITCOIN OFFERED A DECENTRALIZED SOLUTION

13. TRANSACTIONS ON
THE BITCOIN NETWORK
ARE PUBLIC TO EVERYONE
IN THE NETWORK

14. ANYONE CAN VERIFY THAT FUNDS ON THE BITCOIN NETWORK
HAVEN’T BEEN SPENT YET

15. BITCOIN RESULTS IN THE FIRST UNIQUE VERIFIABLE DIGITAL PROPERTY

16. PUT ANOTHER WAY NOW WE HAVE TRUE DIGITAL SCARCITY

17. BLOCKCHAIN APPLICATIONS
THE BUILDING BLOCKS OF
BLOCKCHAIN TECHNOLOGY
NETWORKS+
LEDGERS +
CRYPTOGRAPHY =
BLOCKCHAIN APPLICATIONS

18. THE BUILDING BLOCKS OF BLOCKCHAIN TECHNOLOGY
BY COMBINING THESE THREE TECHNOLOGIES
AND ADDING SOME ECONOMIC INCENTIVES =
BLOCKCHAIN APPLICATIONS

19. Networks: Centralized, peer-to-peer

20. A GROUP OF PEOPLE THAT SHARE INFORMATION AND RESOURCES

21. MUCH OF HUMAN HISTORY CONCERNS SCALING TRUST AND GROWING NETWORKS

22. SCALED HAS BEEN THROUGH THE USE OF COORDINATION TECHNOLOGY
THE WAY TRUST HAS BEEN
SCALED HAS BEEN THROUGH
THE USE OF COORDINATION TECHNOLOGY

23. COORDINATION TECHNOLOGIES
WRITING
TELEGRAPH
TELEPHONE
THE INTERNET
BLOCKCHAIN APPLICATIONS?

24. NETWORKS - TYPES

25. MOST BLOCKCHAIN NETWORKS ARE ORGANIZED AS DECENTRALIZED NETWORKS

26. MOST CRYPTOCURRENCY BLOCKCHAINS ARE PEER TO PEER NETWORKS

27. PEER-TO-PEER NETWORK

28. HOW SHOULD WE ORGANIZE INFORMATION ON THESE NETWORKS?

29. ONE WAY IS TO USE A LEDGER

30. Ledgers: centralized, distributed

31. LEDGERS ARE OLD AND STILL IN USE

32. LEDGERS - ISSUES LEDGERS CAN BE MAINTAINED BY A CENTRAL PARTY
LEDGERS CAN BE MAINTAINED BY MULTIPLE PARTIES THAT
THEN NEED TO RECONCILE THEIR LEDGERS

33. LEDGERS ALLOW PARTIES TO COME TO A CONSENSUS ON WHO OWNS WHAT

34. NOT ALL LEDGERS NEED BE CENTRALIZED OR RECONCILED

35. DISTRIBUTED LEDGERS ARE SHARED/REPLICATED LEDGERS

36. DISTRIBUTED LEDGERS TYPICALLY LEVERAGE PEER-TO-PEER NETWORKS

37. DISTRIBUTED LEDGERS IS HOW DOES INFORMATION GET ORDERED CORRECTLY?
THE DIFFICULTY WITH
DISTRIBUTED LEDGERS IS
HOW DOES INFORMATION GET
ORDERED CORRECTLY?

38. OR PUT ANOTHER WAY HOW DO WE COME TO CONSENSUS?

39. BYZANTINE GENERALS PROBLEM

40. WHAT ABOUT KEEPING THINGS SECRET?

41. Cryptography: encryption, decryption, hashing, digital signatures

42. CRYPTOGRAPHY IS ALL ABOUT SECRETS

43. CRYPTOGRAPHY IS AS OLD AS WRITING

44. MOST CRYPTOCURRENCY BLOCKCHAINS USE PUBLIC-KEY CRYPTOGRAPHY

45. THEY ALSO USE HASHING AND DIGITAL SIGNATURES

46. Great, now what?

47. Applications: blockchain, cryptocurrency, smart contracts, daos

48. Blockchain: A definition
A blockchain is a tamper-evident censorship resistant append-only ledger of transaction data
Note: There is no universally accepted definition of what a blockchain is

49. Two main flavors of blockchain
Permissionless
Anyone can join
People come and go as they please
Usually focused on unique crypto tokens, i.e. cryptocurrency
Lots of questions concerning governance, scalability, legality, etc.
Permissioned
Much more strictly controlled
Favored by large corporations
Need permission to join, and/or view the information stored on the chain
Far less questions concerning governance, scalability, legality, etc.

50. The distributed ledger can be represented as blocks of transactions that are linked together through cryptography

51. Example Blockchain
Source:

52. Got a blockchain. What can you do?

53. Cryptocurrency - verifiably unique digital property
Got a blockchain.
What can you do?
Cryptocurrency - verifiably unique digital property
Smart Contracts - automated agreements that execute in a fault tolerant manner
Distributed Autonomous Organizations (DAOs) - leaderless organizations?

54. CRYPTOCURRENCY: GENERALLY
Cryptocurrency: A Definition
“...limited entries in a database no one can change without fulfilling specific conditions.”
GOOD WORKING DEFINITION
CRYPTOCURRENCY RESULTED IN THE FIRST VERIFIABLE UNIQUE DIGITAL PROPERTY
HERE THAT MEANS ENTRIES IN A DISTRIBUTED LEDGER STORED ON A DECENTRALIZED NETWORK

55. CRYPTOCURRENCY: GENERALLY
CRYPTOCURRENCY COMES IN MANY DIFFERENT VARIETIES
DIFFERENCES BETWEEN CRYPTOCURRENCY ARE CENTERED ON
GOALS FOR THE CRYPTOCURRENCY
PRIVACY LEVEL
HASH ALGORITHM
CONSENSUS MECHANISM

56. SMART CONTRACTS
“A smart contract is a computerized transaction protocol that executes the terms of a contract.” - Nick Szabo
SMART CONTRACTS IN THE BLOCKCHAIN WORLD ARE DISTRIBUTED

57. SMART CONTRACTS
IN THE BLOCKCHAIN WORLD SMART CONTRACTS OFFER GUARANTEED EXECUTION IN A FAULT TOLERANT
OPEN OFFERS GUARANTEED TO EXECUTE IF CERTAIN CONDITIONS ARE MET

58. Decentralized Autonomous Organizations
Blockchain
Cryptocurrency
Smart Contracts
Decentralized Autonomous Organizations

59. WHAT ABOUT PROVENANCE???

60. SOME APPROACHES

61. Potential Applications
Land records
Property registry
Corporate voting
Evidence production
Caselaw tracking?

62. Thank you!
Nelson M. Rosario | Principal - Smolinski Rosario Law, P.C. |
Adjunct Professor - IIT Chicago-Kent College of Law
Visiting Professor - IE Law School
Firm:
Blog: Crypto Caselaw Minute
Personal: