Γεια σας afternoon. My name is Elias Kutsupias and it's very exciting. It's a privilege, a great privilege to be here and to talk to you. I'm going to talk about blockchain and game theory and games in general. So I'm going to have a short introduction on topics like why game theory, what this has to do with blockchain. So if we are going to build, if blockchains are going to be the next great revolution, we need to build a strong mathematical theory. And game theory and more generally mathematical economics seem to be an indispensable tool in this direction. In my opinion it's also, they are also a source of great potential applications. So in order to build a truly universal blockchain, robust blockchain, first of all we have to solve formidable technical problems. So we need to have fast protocols, we need high quality, very reliable code that meets well defined specifications to a very high degree at least. But blockchains and like traditional software systems run by dependent nodes and each dependent node has its own objective. There are other systems that have similar issues and more importantly the internet and of course peer-to-peer systems. They also run on dependent nodes but blockchains seem to have a new game, a new key to the block that has much more complicated technical and economic interactions between the participants. So in order to understand this interaction we need to bring in game theory. A field that is at the intersection of mathematics, economics and recently of computer science. Game theory studies collaboration and competition, it has some very beautiful questions and some amazing answers and it draws from any areas of mathematics. And also intersects with other strange areas like common knowledge, like learning. Most of these concepts were formulated by game theories back in the 50s, well before computer scientists started thinking about them. And also game theory is a source of great algorithmic and computational complexity problems. For example a typical such problem is given a game, is there a Nash equilibrium? This is a major question. Can we compute efficiently a Nash equilibrium? We know that there exists one. Is there an efficient Nash equilibrium? Efficiently computable. So the study of game theory of course is games and a game is defined essentially by two things. The actual definition is a little bit more complicated but there are two things. The first is a set of strategies, one set for each player and then there is the payoff functions, one payoff for every participant. And so if we have a set of strategies instead of payoff functions each player selects a strategy out of his or her set and gets a payoff. The important thing here is that the payoff depends on the selection of all players. So this makes it much more interesting than actually computing a function. It's a function that depends on all the decision of all participants. So what is a solution to a game? A solution is an equilibrium and the most prevalent notion of equilibrium is a Nash equilibrium. And what's a Nash equilibrium? It's a set of strategies so that no player unilaterally wants to deviate from it. So this was defined in late 40s by John Nash. We've seen this similar picture before. And when he was around 20 years old. And furthermore not only he defined this notion he proved his famous theorem that every finite game has a mixed Nash equilibrium. In blockchain technology there are a lot of games around a lot of questions that look like games. So there are a lot of blockchain games but they have something that is very unusual with respect to traditional games. They are dynamic. They are not static settings, stylized settings like traditional games but in fact they are protocols. Each participant, its player, runs an algorithm. All the algorithms together is a distributed protocol and that's the solution. Now a Nash equilibrium is a set of protocols from which no participant has an incentive to deviate. There is something more general here. Blockchain games are usually stochastic. And what is a stochastic game? A stochastic game is a generalization of classical games. It has the following attributes which are so familiar to blockchains. These games have a state. The blockchain itself is a state. The decision is based on the current state. There is usually an external sort of source of randomness as in blockchains. These games traditionally are called games against nature. Nature is the player that provides the randomization. And these games also have incomplete information. Participants don't have complete knowledge of the current state. They don't know what the other players know. And we know these games are very complex and unfortunately we don't understand them very well. In fact we have very few theorems about these games. From computational questions to quality questions. These games were defined by Lloyd Shappley in the early 50s, I think in 1952. Shappley and Nash were fellow students, PhD students at Princeton at the time. It's the time of the movie that Vasili showed you, the actor. So this is the beautiful mind movie. There is a famous scene at a bar where students of Princeton are sitting in and a group of girls comes in. And they decide, they discuss how they plan to hit on them. And then Nash, John Nash, has an epiphany. He understands the notion of Nash equilibrium. And of course as in most of these movies, the movie gets it completely wrong. Exactly the opposite of what is a Nash equilibrium. So both of them, Nash and Shappley, Shappley is better known for Shappley's value. Which is a way to evaluate the power of a voting system. For example, at UN people calculate what's the value, the power of permanent members versus the non-permanent members. So Shappley's value. And both of them got a Nobel Prize. They were not exactly friends. Nash was much younger at the time. Shappley was a war hero. Nash was hooked on him but Shappley probably didn't like Nash so much. Both got the Nobel Prize much later at the end of their lives separately. And Shappley had a good life. Nash had a tragic life up to his accidental end. Okay, so now I'm going to become a little bit more specific. I'm going to discuss mining games. These are specific games that arise in blockchains. And this is where game theory came into the picture of blockchains of Bitcoin. So what's a mining game? So just to simplify the discussion, suppose that consider Bitcoin but this has nothing to do with proof of work or proof of stake. So we can consider Uroboros if you want but usually these games started life with Bitcoin. So imagine that you have three miners or three block leaders. We have the almost red one, almost green one and almost grey player. And they run the protocol of extending of creating the blockchain. So according to the suggestion, they have the following policy. This is the chain so far. They take the last block and they try to extend. Okay, but green player starts thinking. This is smarter than the others probably. He says, okay, what will happen if I press the wrong button, that's one question. The other question is what will happen if I start mining the previous block. So he's a player that has controls 45% of the power, computational power or stake. And with this probability 45%, this player manages to get the next block before the others. Now in this situation, of course the green player is going to continue his chain. The other players may switch to his chain, his path, but maybe not. So let's say that they stay in their own path. So what if he is lucky again or sees lucky again and creates another block. Now the situation is much better. This happens with another probability of 45%. So what's the probability of getting two blocks, these are independent events, this is approximately 20%. But then the other miners will switch to the longest path and they will continue from this. So he managed, the green player managed with some probability, with 20%, some significant probability to create two blocks and remove this red block from the chain. So potentially this will give the green player more money. But if he continued from here, we'll have one red block and two green blocks. So now we'll have only two green blocks. So potentially he can get more money. For Bitcoin he gets more money. For the reward function of Bitcoin he gets more money. This is a profitable strategy for a player that has 45% of power. So this is the game, but we didn't really define the game. So let's try to define it. So in order to define the game again, when I will have such a situation, you should always ask, what are the strategies? What are the payoff functions? So let's start with the strategies. What are the strategies? Every miner now has a following possibilities. Every miner has to decide where to continue mining, the longest path or some other path. When to reveal a block that he managed to create. He may have reasons not to reveal it immediately. There are other things that the miner can consider. For example, which transactions to include in a block. And that's a crucial part of the strategy and Bitcoin as it is right now. In fact most of the block chains would collapse if players start strategizing about the transactions that they are going to include in their blocks. There is something else that we're going to discuss probably later on. There is another thing. What transactions, this looks like a space of strategies, but this fact is much probably larger. For example, a miner can create transactions to include in a hair block or probably not to include in his block and somebody else to include in him. So by creating transactions he may change completely the game. So this is the space, but let's just focus now on, essentially we are going to only focus on where. Only this subset of strategies. So what happens if you decide where to block, where to continue mining, like the green miner before. So what is the payoff function? Okay let's not define it precisely, but intuitively a miner gains if the miner manages to waste enough effort of the other miners. Like the green miner managed to waste the effort of the red miner in the previous picture and this block was removed from the blockchain. But notice that this only happens if the payoff depends on the surviving blocks. So after realizing this, people that design blockchains thought about other reward schemes like Uroboros that says, okay let's change the reward scheme to prevent this kind of games. This kind of bad Nash equilibria. Are these completely successful? In my opinion not completely successful because the strategy space is complicated and we don't really understand it. But it's still a major question. So let's consider a simplified game now. It's a complicated game, but let's consider a simplified game. I want to show you what happens if we consider only the game where the miner decides where to continue playing. So imagine that we have the green strategizing miner and everybody else follows the longest path. This means that essentially they act like one player, but a player that fixes the strategy to the longest path. So we have the red player that plays longest path and the green player that plays starts thinking what's the best of this. So let's focus on the green player. What's his best strategy? First of all, notice that if they play this game, what is going to happen? This chain here, the red chain, is going to be longer than the green chain. Otherwise the red player will switch to the green one, longer or equal. So these are B blocks, these are A blocks. So the question is, if we have these A B blocks, what is the best strategy for the green player? As A is in a path of A blocks, the other is in B blocks, what's the best strategy? And the answer is what's the Nash equilibrium, what's the solution to this is given by this picture here. Imagine that P is something like 0.45, this picture is for something like that. And it says the following. For every A and for every B, the dark area says that if you are here, if the current state is here with this A and this B, then the miner, the green miner should persist on his own strategy, not switching to the longest chain. So if Bitcoin or the longest chain, if everybody plays longest chain, the state is always down here. Somebody succeeds, all of them move there, there are zero points ahead. There are no such chains here, the length of this and the length of this is zero. So if everybody is honest, the state is always down here. But this picture here shows that it pays not to be honest in this, not to play the longest path here, because notice what will happen here, if the red one manages to create one block ahead, we're still in gray area, which means that the green player doesn't switch to the other. So although the other guy is one step ahead, one block ahead, the best strategy is not to switch to that. So this needs a lot of calculation. This is not easy to calculate. In fact, it's a process that depends on the future, what will happen. So this is a Markov decision process and if you make it a little bit more complicated, it becomes a stochastic game, which we don't know how to analyze. So that's why I analyze the Markov decision process here. So that's essentially, I'm going to skip the details of this, but I'm going to just say a few thoughts about mining. So in some proof-of-stake systems like Uroboros, they have a slight disadvantage, or probably a great disadvantage in this mining game over proof-of-work systems, because as it was mentioned before, you know the sequence of miners you've done in advance. So we'll create a sequence for all the epoch so a player knows what is going to happen in the future. So this is going to be the next miner. For example, imagine, let's take this example, that a miner creates a transaction that says I'm going to pay the next miner, and he knows who is going to be the next miner, the miner of the next block, an amount. So this gives incentive for the other miner to abandon the longest chain and come to collect this reward. So there is some safety if the players don't know the future. So in proof-of-stake they know the future and this creates some disadvantage. And also the community seems to realize little by little that creating a blockchain is inefficient. You should be able to create blocks in parallel, like fruit chain is one such idea, like Uroboros, the next version of Uroboros from what I understand have this idea. But then this mining game may become much more complicated and we need to analyze it to be sure that the Nash equilibrium is a good strategy. Okay, but now I'm going to switch to some exciting game that we analyze, some exciting incentive situation which we analyze now with Lars, Duncan and Agelos and my student Christian Koster and Agelos student Katarina Stuka. So let's discuss delegation games. So what's a delegation game? We have here a proof-of-stake and we need to have the stakeholders to delegate their power to somebody else in order to run the nodes. So we need to design a coalition game that each stakeholder selects a delegate and gives a stake to that delegate. It may be herself. And then if we do this, the stakeholders are organized in pools. And then the pool leader, the delegate, runs the node. So ideally we want these nodes to have some special properties. So here is the situation. Imagine that these dots here represent stakeholders. The larger the circle, the larger the stake. So what we want here, we want to create, say, a few of them, a few pools of them, not so many. So we're going to give them incentives to do something like that, that this miner joint delegated his stake to this. And then another one delegates his stake to this. And another one to this. And so on and so forth. So at the end of the process we're going to have four pools in this example. And the central circles there are the delegates and these are the delegates that are going to run the system. So we need to give incentives for this to happen. So what we really need to do here is that we take the gains from running the protocol, say transaction fees, probably some money that comes from another source, and we want to distribute them to stakeholders to give them incentive to do some such behavior. So they come together and they create pools. Say there is a pool of stake sigma i and this pool will get collectively a reward r of sigma i, where r is a function, a reward function. This is the only thing that we need essentially to design. So we need to design a good reward function, right? So that's our objective, define a reward function. Probably there are other parameters here, but let's focus on the simplest thing here. We need to design a reward function r that gives incentivizes the stakeholders to form pools and what we want these pools to have. What is the objective? The objective is that we want to have a given number of pools. So at the beginning of selling we need, say, if you know it's 20 or 100, it depends on the kind of technology. If we have a faster chain, we go to thousands or probably to tens of thousands. But we have a fixed target k and we want the number of pools to be approximately this. And also it makes sense to have incentives so that no pool becomes really large and controls a lot of power. So we don't want dictators. So is there a solution to this question? So not only that, we need solutions that are independent. At least we want to design a reward function that works for every number of participants. We don't know the number of participants, but probably for every distribution of steak, who has a lot of steak, smaller steak and so on, for every degree of concurrency the decision, are they going to decide together or one after the other and so on, are they going to wait, change their decision process and so on? Are we going to have myopic players that just look at the current situation and decide where to delegate or they start thinking about the future and they say, if the others are going to do this, I'm going to do something else. So non-myopic players. And of course there is a decision whether participants are allowed to, or have an incentive to split their steak and go half to steak to one delegate and half of the steak to another delegate. So there is a lot of things that we need to satisfy and perhaps we cannot get all of them, but after looking at this and running some experiments, we ended up with a very simple natural solution, this reward function here. So this incentivizes small pools to come together to join, why, or to small delegates to small stakeholders to come together because they save on the cost and they get the same, the total reward is the same as being separate. So this satisfies them to group. Up to some point, up to one over K, then by joining together they have no advantage, in fact they lose because it's better for them to run separately now. So it goes up to one over K and then no more incentive to grow up. So this is a reasonable reward function that says up to one over K join together then stop joining. So this would create pools of size, intuitively size one over K, therefore K pools. If the total steak is one. So that's the function and let's see some results about it. I'm going to show you two things. Let's first look at the dynamics of the situation of the game and they are as follows. At the beginning, so horizontally here is time and this here represents the size of steak of each pool. So let's look at the last step here when the process finishes. So what we'll have here, we'll have a pool here which is as size 10%, another pool that has approximately 10% and so on, smaller pools, but all of them. The difference between every two lines is the steak of every pool. So we have approximately 20 pools here. It's almost all of them with the same size, so this is ideal. So we started with some distribution and then they grouped together to approximately 20, that was our target, 20 pools of almost the same size, ideal. Assume that everybody is rational, there are no adversaries in this process. Everybody is rational, they will try to maximize their own reward. So this is the end of the process, how we start. We start with all the steak, all the execution, all the... There is one delegate at the beginning as it is now, right, in the system.  And so they start creating more pools and more pools and more pools. For example, at this point here, somebody decided to create her own pool. So that's why we have one more pool at this point. And then this pool grows, grows, and you get this. That's the process. Every time you see a split, it means a new pool is created and a new delegate was created. And then this delegate attracts more and more steak and eventually went up with this ideal, almost ideal picture. Okay, good question, but I was planning not to talk about it. But for this picture here, the following happens. The pool gets some money according to the reward function. They subtract the cost for running the node. The delegate gets some amount, a fraction. This is from fraction, in fact, because of my experiment. But usually we experimented or a fixed amount for just doing the work.  There are other considerations here. In fact, there are two or three other natural ways to share the money, the reward. And this is a very interesting question because usually when they look, this is a question that a coalition of game theory, it's a typical chapter or section in game theory books, they talk a lot about coalition game theory or cooperative game theory, sometimes it's called. But the goal there is to create one pool, a large pool, everybody is in the same pool, and how they are going to get the money out of it. Here we have a completely different objective, which creates other very interesting problems and questions. So here, yes. Okay, good. So this is a misleading picture because it's not exactly time, it's time, it's steps of change. So here is how this process works, which is a randomly one stakeholder. He decides whether to delegate or not, which is another one and another one. Every time a change happens, it's recorded in this picture. So it's not exactly time, it's misleading. I don't see how this can be done. The delegates, first of all, are public and known. They have an ID, they have a name. Other stakeholders who don't want them to have a name, but they can delegate, they have to create a process, a transparent process that shows that they delegate it exactly to one. They cannot use the same stake. These are technical issues. Sorry, where are they? Okay, it's not about fairness, it's about technical specifications. We have a system and this system can run efficiently with K, we decide with K pools, with K delegates. That's why we choose K. We want to choose K as high as possible to have more democracy, but the system may not be able to run if K is in the billions. You cannot have one billion delegates coming together and decide and run a multi-party protocol. It may not be feasible. So we select K to be the largest feasible with the current technology, with the current implementation. And probably a little bit less just to be safe and secure. So here is the picture of what happens before and after. So there are two histograms here, the almost yellow one and almost blue whatever is that color. And so here is the histogram before. This is the stake. So we have chosen this picture here, a Pareto distribution, which means that there are rich stakeholders with very large stake, smaller stakeholders and so on. And the distribution drops fast like this. This is typical distribution with wealth in every country almost. The parameters are not the same, but the range is not that large. This also corresponds to the Gini coefficient, which measures the inequality of this society. So if we fix one of these parameters, we get such a distribution. So running this system with this process with such, a distribution, the end result, the size of the pools are shown here. This is the histogram of the pools. This is almost ideal. All the pools have the same size. And that's what we want, right? Want the stake to be collected to exactly a number, and the number of pools and all of them to be almost the same. Okay. In this particular case, there is a default player that has 10% and just sits there. But this player is not strategic, never tries to maximize the reward. But it's useful in the process in this game. So this is the ideal picture. If we could have this picture for every distribution, for every parameter, we would be happy. Unfortunately, that's not the case. But if we change the parameters, this picture becomes different. So we don't get pools of the same size, or we get many pools more than K. So there is a lot of work that we need to do to understand how this evolves. Okay. I don't want to take much of your time. But let me say a few things, a few words about the applications of blockchains. So blockchains are so exciting today. There is such excitement everywhere. But what's the killer application? We don't have it. Let's admit it. We don't have a killer application for blockchains. There are many applications. There is a great future probably, but we need something more. And let me just describe one possible source of applications. So I don't think that blockchains is just trusted information sharing ledgers. They should facilitate cooperation. That's probably the source of applications. Because blockchains sit exactly between distributed computation and economics. They have this unique position. And so here is one potential application, efficient distributed mechanism design. So I'm going to discuss to elaborate on this. So and in order to do this, I'll take a very simple example and just discuss this. Okay. So let's take a simple example. We have some agents that want to collaborate for a common good. Let's make it precise. We have only three agents that want to collaborate to build a bridge. The bridge say cost 10 coins, billions, whatever 10 coins say. We're talking about blockchains and some of the coins are so expensive that will become a billion, hopefully some of them. So if we manage to collect 10 coins, we will build a bridge. Otherwise, the bridge will not be. Okay. Let's consider three points of view of traditional areas of science. And let's see how they deal with this problem. So we're going to see the situation from the perspective of distributed computing of simple game theory and of mechanism design. So let's go to distributed system perspective. So if somebody works in distributed systems, it has this problem to solve. So they think of the following. They say, okay, the problem is that if these three agents come together, they may not, that is a computation, may not work as we expect. Somebody may not appear, somebody may drop out in the middle of the computation. That's the problem that distributed computation tries to solve. For example, to solve consensus. That's what blockchains do. So what's the solution in this case? A solution is, from distributed point of view, it's just three numbers that sum up to at least 10. So here is a particular solution that is acceptable from distributed computation, one to an eight. If this is a solution, say, okay, they are going to build the bridge. This is not the number, sum up to 10, more than 10, so the bridge is going to be built. Now, okay, that's a solution. Here is another solution. Nothing seven three. The first player does not participate. So that's the solution.  Acceptable solutions are three numbers that sum up to 10 or more. Notice that here there is no major of the quality of the solution. This is a good solution, one to eight. Is it good for every agent? Is it good for the society? That's not a concern of distributed computation. Because they had harder problems to solve, how to coordinate them to come up with three numbers. That was their concern in the 67, this 80s and 90s. Okay, now let's look at this, the same situation from the game theory perspective. Game theory perspective say, okay, let's focus on the agents, on their thinking, on their strategic thinking. Agents have utilities that associate the value to every solution. So what is a natural thing to do here? What is the natural game to define? First of all, they want to build the bridge. Everybody wants to build the bridge. Otherwise for them it's a disaster. Their utility becomes a minus infinity. And if they build the bridge, they want to pay as little as possible. So that's their utility. So once we define this utility, then the solution is an equilibrium. Let's say a nice equilibrium. What are the solutions for this game here? So it's every three numbers that sum up to exactly ten. Less than ten, we will not have a bridge and it's a disaster for everybody. More than ten, it means that some player has a reason to deviate to decrease their contribution. So every such triple is a solution from the game, is a nice equilibrium. Now notice what's the problem here. A bad dance of nice equilibrium. Which one is good? Which one is bad? It's not prescribed in the definition of game theory of nice equilibrium. And there is no interaction between the players to influence the quality of equilibrium, because there is no such quality. There is no defined such quality. Okay. Now let's look at a more sophisticated game theory. Let's look at the mechanism design perspective. Mechanism design perspective is even stranger. It says, okay, let's have somebody help us do this. So we associate the solution with an external entity. An auctioneer usually. But here I say just the mechanism design, the guy that runs the mechanism design algorithms. So there is an external entity that is going to help them coordinate. How? So this entity is going to ask the three players to give their values. How much they are willing to pay for the bridge. Notice that this is a private value is known only to the players, not to the entity. And then looking at these numbers that he gets, he gets three numbers essentially. This entity gets three numbers and out of these numbers computes how much each one should pay. And the problem is that these numbers are private and the participants have reason to lie. But there is an ingenious solution since the 60s for this problem. Even if they can lie, you can still solve this problem, almost solve it. So there is a catch here while allowing the entity to contribute money or get out money of the system. So if we allow the entity to play with money, to use or to contribute or get away money, then there is a solution. And here is a solution. Each agent tells their value and the solution for this for the bridge problem is the following. You pay, each one pays as little as possible in order for the bridge to be built. Assuming that the others pay their actual amount. So let's make it precise. Suppose that we have three players with values 3, 4 and 5. Their sum is 12, more than 10. So in such a society, we can build the bridge. So this algorithm here, this mechanism design, asks the players, the first player to pay only one, although his value is 3, he pays only one. Because the mechanism promises this player to pay the minimum amount to build the bridge provided that the others pay their full amount. So if the others pay 4 and 5, you need just one, you need to go up to 10. So the first player pays one. Similarly, the second player pays 10 minus the values of the other players, 2 and the third player pays 3. So that's a solution, that's a mechanism design solution. It has some great properties. It's incentive compatible. Nobody has a reason to lie. Why? Simple. Let's look at the first player here. He pays one, is calculated by this formula here. This formula does not involve the number that he reported. So he has no reason to lie. No matter what the player reports, he is going to pay one. So that's what's incentive compatible. Meaning that it's truthful. The player has no incentive to lie. Even better. This is a dominant strategy.  It means that every player in isolation decides what is the best strategy independently of what the others decide. In a distributed system, this is a great solution. But few games have dominant strategies. Here, who created a game that has dominant strategies? But there are some problems, of course, with the solution. We have already observed that they pay an amount of one, two and three, which is six, which is less than ten. Where the difference of four comes from the external entity, who have a God that pays for everything here. And notice also that there is no direct interaction between the players. There is interaction between the entity and the participant. So they need this intermediary to solve their problem. So that's why blockchains may be a solution here. So the problem that we just saw is a single dimensional problem. Each player had just one value. Usually, when we want to coordinate, players have many values. For example, when there is an auction for frequencies for cellular phone companies, they have a lot of information. In fact, they don't know how much they are willing to pay, because it depends on the area, what frequencies they want and so on. And just communicate, first of all, they don't have this information, but even if they had and communicating it to this external entity, it would have huge cost. And they don't want probably to even to reveal this information. So in this multi-dimensional games, who have these multi-dimensional situations, they are more complicated and they have very high communication complexity. So the question, of course, is can blockchain technology provide a better solution for such problems? Can it facilitate distributed mechanism design schemes that achieve at least two things, better solutions? Because none of the three solutions we have seen so far, the distributed approach, the game theory approach, the mechanism design approach, none of them gave a satisfactory answer. Far from what one would expect as a good solution. So can we use the new technology to get better solutions? And can we use it to get a solution that requires less communication between the players, between the participants? And it seems that the blockchains have exactly all the right ingredients. They allow decentralized interaction, they have now smart contracts, there is trust, there is money, there is a great community. So let's solve this problem. Thank you.


There's an old view of trade, which was that trade was governed by industries. How we think about trade is different to what it is before. And part of that relates to this idea of what is a product, what is a good. So take the German car. When you drive a German car in Australia, the BMW M3, you think this is a German car. In fact, that car comes from South Africa. When you unpack it a little bit further, that's also not a South African product. Although it was assembled and a lot of the production occurred in South Africa, the components, the inputs that were used in that production process actually come from other countries as well. So the steel may come from South Africa, but the glass comes from abroad. So this idea of a good being South African or the idea of a good being German no longer works in the current world environment. Some inputs come from domestic firms, but a lot of inputs actually come from abroad. There's a strong concern, we see it emerging in America as well, this concern that competition, international competition, drives out domestic firms. It causes the deindustrialization of manufacturing and it results in job losses and manufacturing job losses, but the angle I think that's been missed and is often missed is the role that imported intermediate inputs play in complimenting domestic production. So when we actually look at what we import, for example in South Africa, most of our inputs that we bring in are made up out of intermediate inputs and they're made up of capital goods. These are core components to the production process, which suggests that domestic firms rely on this international environment to access key inputs that allow them actually to produce their output. So what we're interested in, we were trying to focus on is this complementary relationship between access to international intermediate inputs and production, to try and balance the story about competition and competitive effects of international trade. We were able to follow 20,000 manufacturing firms over a four-year period, so it gives us a lot of depth across firms and a reasonable time period to try and understand how firms are interacting with this international environment. Our focus is on the relationship between imported intermediate inputs and firm outcomes like productivity and export performance. So the critical relationship is the access to the imported intermediate inputs. So we find a couple of very strong relationships. They are associations, but the first association we find is that firms that import intermediate inputs directly tend to be much bigger. They pay higher wages, they employ more labour and most crucially for our first question is they tend to be more productive. The second key relationship that we find is that exporters that import intermediate inputs tend to export more. They export more varieties, they export to more destinations and they export more products. So there's a very strong correlation and association between firm export performance and firm's import behaviour. Our finding challenges the sort of standard discourse within South Africa at least and somewhat globally that imports are destructive for jobs and are destructive for firm performance. We tend to find that access to imports is a critical component of firm outcomes, particularly productivity and exports.


Good morning ladies and gentlemen and welcome to the change of command ceremony for the United States Naval War College where rear Admiral P. Gardner Howe III will be relieved as the president of the Naval War College by rear Admiral Jeffrey A. Harley. Our guest speaker today is the chief of Naval operations Admiral John Richardson. The official party will arrive in just a few moments. At this time I would ask that everyone turn off or silence your cell phones or communication devices. For those here who might be unfamiliar with the traditional change of command ceremony I'd like to explain some of the background for today's event. Fundamental guidance for the change of command aside from the long-established customs and traditions resides in U.S. Navy regulations. The 1865 edition of regulations for the government of the United States Navy, Article III, Section 1, Number 72 states, When an officer is appointed to the command of a single vessel he will make, in company with the commanding officer, a thorough personal examination of her and inform himself as to all her arrangements and preparations of equipment. After which the transfer is to be formally made in the presence of as many of her officers and crew as can be assembled, before whom his appointment is to be read. Today's event will follow the accepted traditions and customs of a Navy change of command ceremony. Specifically, at the appointed hour the outgoing Naval War College President Rear Admiral Howe and his relief, Rear Admiral Harley, along with our guest speaker, the Chief of Naval Operations, Admiral John Richardson, will proceed to the stage together. The ceremony routine will include traditional side-boy honors, color guard, the singing of the national anthem, and an invocation and benediction. After a few brief remarks, the outgoing officer, Rear Admiral Howe, will read his orders of detachment. He will then turn to his relief and report, I am ready to be relieved. The relieving officer, Rear Admiral Harley, will step forward and read his orders to command after which he will salute Rear Admiral Howe and report, I relieve you, sir. They will both then report their relief to the Chief of Naval Operations. The new Naval War College President, Rear Admiral Harley, will then give his remarks. I will then ask everyone to stand for the benediction and the departure of the official party, which will conclude the ceremony. Today's ceremony will be uncovered for everyone in military uniform, except those in the official party. Ladies and gentlemen, please rise for the arrival of the official party, the parading of the colors, the singing of our national anthem, and the invocation. Staff, uh, tin, hoot. Boson, post the side boys. Rear Admiral, United States Navy, arriving. Naval War College, arriving. Naval Operations, arriving. Retire the side boys. Color guard, parade the colors. First Smith, Navy Band Northeast, will now sing our national anthem.  Almighty God, by the creed justice, who rules in all the kingdoms of men and gives them to whomsoever you will. We pause as we begin this ceremony to acknowledge your role in our history, in our lives, and in all our undertakings. In each generation, you have blessed America with selfless leaders who have defended our great nation from every threat that has risen against her. Today, we thank you for the faithful leadership. Rear Admiral Gardner Howe III is provided as 55th President, United States Naval War College, these past two years of challenge and change. Through his vision, guidance, and personal dedication to duty, you have challenged each of us to rise to the call of self-sacrificial leadership with honor, courage, and commitment. We are grateful for the service he and his wife, Erin, have rendered to our country and for their special place in our War College family. We ask that your blessing would go with them now as they leave us for new opportunities, responsibilities, and leadership in service to our great country and the Navy. As Rear Admiral Jeff Harley assumes command, we thank you for the experience, leadership, and character he brings to the office of President of the War College. We ask for him your guidance, wisdom, and help as he guides us through the challenges ahead. For those of us who follow his leadership enable us to give him our full loyalty and support. Bless his family and wife Cindy, grant them your presence, peace, and strength in the days to come. Bless these proceedings we pray with your presence, that we may be strengthened and equipped ready and willing to act according to every good purpose. Please be seated. Ladies and gentlemen, the 55th President of the United States Naval War College, Rear Admiral P. Gardner-Howell III. Good morning everyone. I know I speak for Jeff when I say that he and I are both very, very pleased that you were all able to join us, family, and the Naval War College team for the Archangel Command Ceremony today here in Spruance Auditorium. Chaps, thanks for the very thoughtful invocation. And how about Navy Band Northeast and that heartfelt rendition of the National Anthem by Petty Officer Smith. So as I take a look across the RSVPs and those that have gathered here today, I am very, very impressed with the distinguished guests that have spent time with us, decided to spend time with us this morning. Jeff and I both intend to talk about family and friends that have gathered here in a few minutes, but I thought it would be worthwhile to just acknowledge some of the key leaders that have come today. So, you know, a more formal introduction in a few minutes, but thanks for presiding over today's ceremony. I know Admiral Burke and I think Fleet Beldo are here today. Thanks for showing up. Admiral Verma and his wife, Madhu. If you haven't met them yet, please do later at the reception. Admiral Verma was a former CNO of the Indian Navy, former Indian ambassador to Canada, and is now an international fellow on the faculty here at the college. Mr. Tyrone Smith is representing Senator Whitehouse from the U.S. Senate. Art Flora, bigotier general of the Rhode Island National Guard, representing our guard friends here in the state. Captain Dennis Boyer and his wife, Carrie, are here. The Naval Station CO, Captain Doug Noble, they're new, relative, very new. One week in the job of the CO of the Supply Corps School. I know Mike Doherty and his wife, Beth, are here. He's the CO of the Naval Academy Prep School. Mike Savigio, the CO of the Officer Training Command. Commander Dustin Smiley, the CO of the Operational Support Center here in Newport. Doctors Catherine McGrady and Eric Thompson are here from the Center for Naval Analysis. Mr. Ed Lazotti is here, representing President Somerson from the Rhode Island School of Design. And I'm sorry, Babette is here. Babette Alina is here from Rhode Island School of Design. And Mr. Lazotti here, representing Johnson and Wales and President Rooney. And then many members from the Naval War College Foundation, leaders and trustees. Admiral Hogg is here. Ambassador MacLennan, Steve Sider, Admiral Whistler, Happy Van Buren. Mr. Bowen, Mr. Peterson and John Otagard, thank you all for being here. If I fail to mention anyone that should have been mentioned in that list, my apologies. Please accept those apologies and just know that we are very, very grateful for your presence today. I think it's fair to say that one of the most significant lessons that the Naval Special Warfare Community, the soft community, the Navy has learned over the last 10, 15 years of conflict is that organizations and operations, they are most effective when they are fully integrated into a network, a network of support. Or to use the phrase that was coined by General McChrystal when organizations and operations are part of a team of teams. And when I think back of the experiences that I've had here over the last two years at the Naval War College, that's what it's felt like that we are a part of a team fully integrated into the local area, the region, and into the Navy. And I would offer that the leaders that have shown up today, dedicated their time, is representative of the strength of those relationships. And Jeff, I think it bodes well for the future too. So I move on to my main task right now, and that's to introduce our guest speaker, the 31st Chief of Naval Operations Admiral John Richardson. So the CNO was a 1982 graduate from the U.S. Naval Academy, a distinguished submarine officer. He was the recipient of the Vice Admiral Stockdale Award, the most distinguished leadership award that we have in the Navy. And he got that for his time in command of the USS Honolulu. And after Honolulu, he continued to serve with distinction in leadership positions. Commodore of Submarine Development Squadron 12, Commander Submarine Group 8, Commander Submarine Allied Forces South, Deputy Commander of U.S. Sixth Fleet, Chief of Staff of both Naval Forces Europe and Naval Forces Africa, Commander Naval Submarine Forces, and most recently, Continued Admiral Rickover's legacy as Director of Naval Reactors. And then in between all of that and some additional staff times, he was selected and served as the Naval Aid to the President. Got a Master's Degree in Electrical Engineering from this little university up north called MIT. And then got a Master's in National Security from a lesser known PME institution down south called the National War College. He's been serving as the 31st CNO since September of last year. And since then he has been leading our Navy's effort to confront the challenges that we face from rising and resurgent state actors at the same time we're confronting an increasingly complex and challenging world. And he's doing that with an absolute focus on warfighting readiness and our primary responsibility, maintaining maritime superiority. Sir, we're honored to have you preside over the ceremony today. Ladies and gentlemen, the 31st Chief of Naval Operations, Admiral Richardson. Thank you, Admiral Howell. That was a far too generous introduction, but you did read it exactly as I wrote it, so I appreciate that. Well, good morning to everybody. What a wonderful place to be here this morning. Thank you all very much for joining and just to help us celebrate this absolutely terrific occasion and to celebrate an outstanding naval officer. I just add my welcome to Admiral Howell's for all our distinguished guests here today, particularly to our international partners for being here and as well to the families of both Admiral Howell and Admiral Harley. You know, there's been a lot of talk in the news lately about, you know, presidential succession. And finally here this morning at the Naval War College, we get to understand what all that talk is about. And, you know, actually there's only two presidents in the Navy. There's the president here at the Naval War College and there's the president of the Board of Inspection and Survey. And so in the spirit of presidential transition, I think we can say a couple of things. One, we're here to witness what I hope has been and will continue to be a peaceful transition of power. And I think we can also be very, very grateful that there was no campaign period at all. And that the transition period, we call it turnover, was short about, what was it, a two weeks week or so. So we can all be very grateful for that. But, you know, even as we express our gratitude that this is much more straightforward than the other presidential transition, we also know that there's so much more to this day that we need to be aware of. And if you think about the significance of the ceremony today, you know, what this means, the official part, you know, which was outlined for you before the arrival of the official party, that part could be done in many, many ways, right? I mean, literally, we could get Admiral Howe and Admiral Harley together in an office and they could read their orders, say the words that you'll hear later on today, exchange a salute, and it would all be done. And it would be completely official and it would be legitimate in every way. But that's not what we're doing here today. Instead of that, we are choosing to come together in our dress uniforms. And I think that we do this for very good reasons. I'd like to talk about three solid reasons that we do this in a public ceremony, vice in private. First, I would say that we are here to honor the import and the meaning of the ceremony itself. And in a time where we read so much about people fleeing accountability, we come together here to witness a salute. And in the exchange of that salute and a few words, so will transfer completely the authority, the accountability, and the responsibility of being the president of the Naval War College and running this flagstone institution from one person to another. And so we gather here to witness that transfer. Secondly, it allows us all to be present here and to be a witness of this formal passage of authority. And so with that, with our witness in public, there can be no doubt or ambiguity.  And so just as authority and accountability and responsibility transfer will transfer soon from Admiral Howe to Admiral Harley, so does our allegiance and our loyalty to the new boss. We will follow him now, and that's the way we do business. That's how our system works. And of course the third reason, just as important we are here today, is to celebrate Admiral Howe's absolutely terrific performance as the president of the Naval War College. You know, when we take command in our business, we take full ownership of that job and we act the best commanders act to the absolute limits of their authorities. And we welcome scrutiny, we welcome accountability. And these have been features of Admiral Howe's tenure here as the president of the Naval War College and these features rank among the most important attributes of our Navy team. It's not lost on me that we are also here in Newport at the Naval War College. What a distinguished institution, a national treasure. And I've got to say that in addition to those three very important reasons, I am here just to help celebrate and recognize the importance of this institution. The college's principal job is to educate tomorrow's Navy leaders and it has never done so better than it is doing today under the leadership of Admiral Howe. The students here build strategic relationships under the careful guidance and mentorship of the faculty. They build those relationships with people across the Navy. They build those relationships with leaders across the nation and indeed across the globe. These relationships, these strategic relationships, reverberate across our fleet. They make us a stronger Navy team both today and into the future. And it's also no coincidence that from our international community more than one third of those officers will make flag rank in their Navy's. They are here because they have tremendous talent, tremendous potential and they are integral to the Naval War College and to our U.S. Navy's future. They help us come together to bridge across nations and cultures to build those strong bonds of trust and confidence that will serve us in conflict and they provide essential diversity to our thinking. You know, the War College has a rich tradition of adapting to the demands of the security environment and it has never been more dynamic than it is today. And this, you know, the ability of the college to follow along that dynamism has never been more important. And I've spoken here before and in those other talks I've looked back on the history of the War College and described it in terms of three distinct periods, each one of which where the War College was on the leading edge of Navy reform. First, there was its founding period in 1884. The second period might be thought of as the interwar period, which was so fundamental to the development of the war plans that allowed us to fight and win in World War II, particularly in the Pacific. And then the third phase I would say is the period since Admiral Stansfield Turner got here and reformed the curriculum. And as I've said today, I get the serious sense that we are at the dawn of a fourth period in the War College's history, to which the Navy will be challenged to fight not only powerful nation-states, but also terrorists and transnational forces of violence and not only in sort of classic conflict, but in many other forms of competition, some of which are violent, but are just below the threshold of what we might want to call classic conflict. You know, for more than 130 years, the Naval War College has been the birthplace, the cradle, and the home of naval strategy, and it's clear that that role has been enhanced in the last two years under Admiral House leadership. And as we head back towards an era of great power competition, the Navy's maritime strategy will lead the direction of national strategy and become even more relevant than it is today, if you can even conceive of that. It seems that none of history's challenges go away. They just simply add on. They layer on complexity and they layer on demands for our Navy. Today, we can see this even more clearly. No crisis anymore is a regional conflict. Everything is at least transregional, if not global. Similarly, there is no such thing as simply surface warfare or undersea warfare. All of our fights are multi-dimensional, including space and cyber, which are two brand new dimensions that the previous generations of war college teachers and graduates did not have to wrestle with. And I would say that more than anyone else, Admiral Howe understood and grasped this complexity. He seized it by the horns and has taken the initiative to lead this great institution into our future. And so, that third reason, the reason we're here to celebrate the command of the absolutely terrific person, a commander, a leader, and a visionary. And I would say that this challenge would have spooked most people. They would just say, hey, forget about it. This is too complicated. I've got to leave the field to someone more capable. Admiral Howe has instead exerted that calm, cool approach that has characterized his service over the decades.  Of course, you kept the institution fair in the channel on its core missions, providing joint military education, master's degrees to the best officers from across our military. Similarly, your work making wargaming more responsive to fleet needs and accelerating our learning cycle from game to game was also absolutely crucial. And from the expansion of the global wargame series to the permanent establishment of wargames conducted at the highest classification levels to the new virtual community of practice, Gardner, you've built the framework by which we have developed new operational conflicts to manage this operational complexity. It's now an absolutely fertile environment for new ideas. But I've got to say that despite keeping the engines running and that joint professional military education solidly on track, despite the advances in wargaming and making them more responsive and more relevant, the thing I have to confess I am most impressed with is the work by Gardner and the team to advance the concepts of leader development. Admiral Howe defined and instilled in all of us the idea that our Navy is at the same time both a profession and an organization. And as a profession, we are defined by our values, honor, courage and commitment. I've got to confess to you that in an era of intense competition for people and for talent, we cannot offer in the Navy the huge salaries that the private sector can offer. Furthermore, beyond not being able to meet the salaries, we also ask tremendous sacrifices of both our sailors and our civilians. We demand a very high level of dedication. And despite these implications, pay and schedule, we fill our ranks, we meet our recruiting goals and we meet our retention goals. I brought the chief of naval personnel here personally just to check me on this. Am I right, Bob? All right, there you go. And so I believe more than anything else, our success in keeping our ranks manned is directly related to the value proposition that we make, that we offer our people the chance to be part of something bigger than themselves. And so that is why I have nothing but the highest respect for those who even in the midst of 10 to 15 years of continuous conflict, even as our people could make any choice they wanted to in terms of pursuing a career, they choose to raise their right hand, make an oath to support and defend the Constitution of the United States at tremendous personal sacrifice. That's because of the values we share as a profession. As an organization, we are defined by our behaviors, how we act each day, day in and day out, how we treat one another in a company and how we make decisions when nobody is looking. And a Navy that has integrity behaves in a manner that is consistent with their values. And this has been Gardner's key message to us. It was his influence and his personal inspiration that resulted in the inclusion of the core attributes of integrity, accountability, initiative and toughness in the design for maintaining maritime superiority. Those attributes Gardner reminded us as we were putting the document together serve as a litmus test for our behaviors. If we act consistently with those core attributes, we stand a much better chance of ensuring that our behavior is consistent with our values. And that is a Navy of integrity. And people with talent who are attracted by our values said they are also smart enough to detect a say-do mismatch in an instant. And the best of them will leave. But Gardner has reminded us how to keep our behaviors in line to be a Navy of integrity and to retain those special people. This is especially true and I think most effective in the context of fleet-centered leadership development. The idea of leaders engaging and building leaders in wardrooms, chiefs quarters and ready rooms, developing the next generation of our leaders by working closely over their shoulder on the deck plates across the fleet. A persistent focus on developing both competence and character. A force with clear-eyed stewardship of the profession of arms. All of this demonstrates that Admiral Howe has had his eye exactly on the right ball and has led his team. Bringing our Navy's leaders forward to meet this century's coming challenges. Gardner, I could not be more happy that you were on the job for the last two years. And I know that the War College is going to miss your energy, but I will tell you it was clear to me. You left it all on the field. You sprinted to the tape and you were crossing that finish line with absolutely nothing in reserve. You gave it all here. And you didn't do it alone. You know, they say, Erin, that behind every successful naval officer there is a surprise spouse. You have been the rock, the one who has kept the family ship on course, on speed, on track. Your full-hearted commitment here to the Navy, to our Navy families, to the War College families has shown in everything that you've done here. And I want to thank you for your dedication and your commitment to both the War College and to Gardner. It is just, as Gardner said, we are a team of teams and we could not do it without our family team. So I think we should all give Erin a huge round of applause. So, Gardner, we're so grateful for your leadership, you and Erin. But I also know you are turning over the reins to the best possible replacement in the United States Navy. Alba Harley comes with tremendous amount of experience, a gigantic intellect, and untapped energy. Jeff, welcome. Congratulations to you and Cindy to just a super exciting job. A job that is absolutely vital, and I know you both will be terrific. So welcome aboard. In conclusion, I just want to wish Gardner, you and Erin the very best. I hope that you get some time this summer to relax a little bit, come off the governor a little bit, play outside with Keela and Cato, or maybe peel them off the vice president or his detail. Who knows what's going to happen there on the observatory. I'm told that those dogs also need to burn off some energy. And you've become quite the amateur racer on one of the sailboats down at the marina. That reputation is spreading throughout the Navy like wildfire. And I hope you'll have time to practice taking commands instead of giving them one last time before you depart. I know that you'll be absolutely terrific at your next position, one that I am really looking forward to tracking you in. And I thank you both for your dedication here at the Naval War College. In closing, I just have one favor to ask everybody here. You know, we're going to, of course, celebrate this day. It's worthy in every respect of celebration. We're going to go to a reception and we're going to execute the rest of our day. And it's going to come to an end and we're going to go to bed. And I ask you all that as you put your heads down tonight, before you go to sleep, take a moment to say a quick prayer for Gardner and Aaron, for Jeff and Cindy, that they can continue on with the peace and success that has brought them to this point. And also keep in mind in your prayers, our Navy, our sailors, and all our servicemen deployed at sea around the world. Thank you all very much for your time and for attendance today. God bless the Naval War College, our Navy, and our nation. Thank you. Ladies and gentlemen, once again, the President of the United States Naval War College, Rear Admiral P. Gardner-Howell III. Good morning again, everyone. Admiral Richardson, distinguished guest family, friends, staff, faculty. Thanks again for joining us here today. Almost all changes of commands, I think, have a certain element of bitter sweetness to them. But for Aaron and I today, there's a lot of bitter sweetness in this ceremony. And that's mainly because of the way that this community has literally stolen our hearts. Newport and the Naval War College have connected with us in ways that were totally unexpected. We right now, we do have a sense of excitement for what might lie ahead for us, but it's mixed in with a much, much stronger sense of sadness as we get ready to leave this institution and this area. This is a superb command, and I'm very, very proud to be a member. Proud of the college's legacy, proud of where the college is today, and proud of where the college is going. The importance of education, formal education, graduate-level education in the profession of arms, the importance is more clear to me than ever before in my career. We will not train our way to success in today's environment, nor will we train our way to be able to meet all of tomorrow's challenges. Training is, and it will remain a critical component of developing leaders, and it is absolutely essential to developing tactical competencies, but training is not enough. We have got to understand how to apply those competencies within the context of this dynamic, complex and challenging world, and that requires education. Only through focused education are we going to be able to inculcate the character and the critical thinking skills that are necessary to develop those leaders that are ready to thrive, not survive, thrive in chaos and complexity. And so to the Naval War College team, to the incredibly talented faculty, and the incredibly supportive and capable staff, thanks for all of your efforts day in, day out to develop just such leaders, leaders that are strategically minded, leaders with absolute critical thinking skills, leaders that are able to operate effectively in this increasingly dangerous world today and are ready for those challenges tomorrow. From facilities to the deans and everyone in between, your professionalism and your dedication, it has been inspiring and it has resulted in a real impact on our Navy. It's been an honor to serve with you as the President. I've enjoyed every minute of being on this team. So as the CNO said, I can think of no other officer in the United States Navy that is more excited or more well prepared to take over the reins here at the college than rear Admiral Jeff Harley. Jeff has had a diverse operational and intellectual background and experiences absolutely perfect for guiding an education institution focused on a complex world. We've been joking around a little bit recently stating that if it was up to Jeff and Cindy, I think Aaron and I would have had to have been out of here about four or five months ago. He is chomping at the bits to take the reins here and I know that he's absolutely ready to go. Jeff, I wish you and Cindy the very, very best of luck here and I hope that you guys enjoy this time here as much as we did. Before reading the orders, I'd like to express some appreciation to some of the key folks that are here, folks that have had an impact on the college or on my personal and professional life. CNO first, I'd like to thank you and your predecessor, CNO Greenert for extending the trust and confidence that you did to bring a seal to the Naval War College and gave me the opportunity to serve as the president of this institution. You're a role model for me, sir. You've shown the entire Navy what Wright looks like. I'll do my best to continue to live up to that. To the leaders of state, regional, local, communities and academic institutions that are here, the stellar reputation of this college across DoD and the Joint Force, it is due in no small measure to the incredible hospitality and the support of the local constituencies here. Thanks for your outreach and support of the college and our students. We are a team of teams and it makes Rhode Island stronger. To the Naval War College Foundation, I'd like you for all you do to support both the legacy and the future of this institution all year across all aspects of the campus. You provide this college what we like to refer to as that margin of excellence. We would not be as successful as we are today if it wasn't, if we didn't have the professional relationship we do with the foundation. So please pass my thanks to all the members that aren't here today. A quick shift to some families and friends that are here. To my sister Anna, she is a recently retired member of the Senior Intelligence Service completing a distinguished career at the CIA. So she's my younger sister but I've spent the best part of my life trying to catch up with her. So now that she's retired but I might have an opportunity to continue serving, I might be able to do that. But sis, thanks for being here for your love and support throughout the years. I know that Anna would not have achieved what she did nor would I have achieved what I have been able to do without the support and upbringing that I got from my parents. For my very, very earliest memories they taught me and my little brother, Warren. They taught us the value of honesty and hard work and the importance of service and they couldn't be with us here today but I know that they're here in spirit as they have been absolutely throughout my life and for that I will be ever thankful. To my aunt and uncle, Carter and Margaret were able to drive up from Florida and more recently from Connecticut into the Cousin Hopkins. Thank you all for being here today and sharing it with Aaron and I. Commander James Marvin and his wife Joanna, it's great to have the Unit 3 team together again however briefly. James, I've said it before but you have shaped my thinking and my leadership approach in ways that you don't know. I'll forever be grateful for that. And I want to thank you too for your continued service to the nation and all that you do in private sector now and we'll be friends forever. So about, yeah, just about 36 years ago in the summer of 1980 about a thousand, maybe a little bit more than a thousand young adults reported to Annapolis, Maryland and the Naval Academy and started Plebe Summer. And I spent that summer in the next four years with the members of 35th Company at the United States Naval Academy and very surprisingly but awesome for me four members of the class of 35, class of 84, 35th Company ended up being here today to share today with us. So JJ Jordan, my roommate from that very, very first day in the Navy, very first day in the Navy and his wife Jeanette, Wade and Townley are here, Chris and his fiancee Denise and Bombs. Bombs was my last roommate, my kind of rugby, my rugby brother and probably one of the more negative impacts on my life over the course of the years. But we have survived. Great memories, great, great, great memories. I'm humbled that y'all were all here and I would just ask everyone, especially the CNO and the reception, if there's any stories come, I'll take them all with a huge grain of salt from this group. To the local sailing community, our Navy Yacht Club, Bento Solare, Frostbiders and Halsey Hershoff. Thank you all for making sailing such an enjoyable part of Erin and my experience here in Newport. Thank you guys have had a significant impact on our lives. There's been a little bit of a sailing gene that's lying dormant for so many years but we got back to the Narragansett, spilled some Narragansett water on it and it came alive. We look forward to getting back to these waters someday, flying kites, maybe having a cocktail, pointing high, winning races with all of you. Thanks for being here today. And then finally just a thanks to my best friend and to my soulmate, E. So throughout the career and other jobs before, lots of good times, some tough times too, but she has been a steady, steady element of support throughout all of those times and I've said it before, E. I'm a better person and a better officer because of you and my life. Thanks for the difficult times and I'm looking forward to whatever the future is going to hold for us. And as a very small token of my appreciation, let me present you with just these flowers. Thank you, sweetie. So Chairman Dempsey, the former, yeah, General Dempsey, former chairman of the Joint Chiefs of Staff. So he once identified leadership, the leadership of the United States military as our nation's incalculable, asymmetric and competitive advantage over our adversaries. It's a powerful statement but I think it underscores the absolute importance of what this institution does. And what it has continued to do over the course of its 132-year history and great tradition of educating and developing that very leadership. Let me close once more by just stating how honored and humbled I am to have been part of that tradition. Thank you all again. May God bless you, the Naval War College, United States Navy and the United States of America. So I will now read my orders. Ladies and gentlemen, please rise. Military guests, attention to orders. CNO Order 1396, when directed by reporting senior, detach in August 2016 from duty as president of the Naval War College. Report not later than September 2016 for duty at the Chief of Naval Operations Staff. Chief of Staff, hold down my flag. Aye, aye, sir. Master Chief, hold down rear Admiral House flag. Admiral Hawley, I'm ready to be relieved. I will now read my orders. From the Chief of Naval Operations to rear Admiral Jeffrey A. Harley, subject CNO Order 1336. When directed, detach as the Assistant Deputy Chief of Naval Operations for Operations Plans and Strategy and report to President of the United States Naval War College as his relief. Chief of Staff, break my flag. Aye, aye, sir. Master Chief, break rear Admiral Harley's flag. Flag has been broken. Very well. Ladies and gentlemen, please be seated. It is my pleasure to introduce the 56th President of the United States Naval War College, rear Admiral Jeffrey A. Harley. CNO Distinguished guests, friends and family, I am thankful for everyone's presence today at this time honored tradition. I am grateful to so many. I stand on the shoulders of many of you here in this audience, but I'm especially grateful to Gardner Howe for his tireless leadership and extraordinary accomplishments during his tenure as the President of the War College. I should, of course, mention the extraordinary contributions of the Naval War College Foundation to the great success of this college. I'm also very blessed to have my family here, my wife and life navigator, Cindy. I love you. My daughter who is here in spirit since she has her dream job and is designing theme parks at Universal Creative in Florida. My Aunt Becky is here from Georgia with her grandson, midshipman Alex Parker, the future of our great Navy. My brother Charles and Mary Thomas are here from Georgia. My mom and sister and my dad are no longer here, but no doubt watching from the golden fields of heaven. I'm also blessed by so many friends who are like family to me. My childhood friend Mike Edwards is here from Michigan. Shipmates Bob Vince from my first ship, Samuel Elliott Morrison. Leo Gracili from USS David R. Ray. Mary Lou Taylor, a friend in her own right, but representing her husband Captain Rob Taylor from USS Cowpens and USS Samuel Elliott Morrison. Crispin Rowe is here from Maine. He was on my first command at USS Milius. Admiral Mike Mann from Deep Blue. Dr. Eric Thompson from the Center for Naval Analysis. Joined here as well by the president of the Center for Naval Analysis, Dr. Catherine McGrady. Bless you for your incredible contributions to our naval service. Hedy Henderson, who is one of the greatest minds of our time is here. Worked with her in U.S. Central Command. Truly extraordinary. My Mandarin tutor, my Lauscha Amy, who did her best to teach an old dog Mandarin this last year and a half. Me how Amy? How's your bougie in? And depending on the tonals I either said, long time no see or the iguana is in my car. I am sadly sure there are other friends I have failed to mention and I ask your forgiveness as my old eyes simply fail me. Again, we're honored by everyone's presence and any success I have shared is truly yours. Bless you all for your service and sacrifice. I am truly humbled to become the 56th president of the United States Naval War College and I am honored to join a great team in this critical mission. To the War College team, I'm delighted to be in the arena with you to carry on the extraordinary work and contributions of this unmatched institution. As the CNO said, ours is a complex and dangerous time. But as President Teddy Roosevelt said, it is not the critic who counts, not the man who points out how the strong man stumbles or where the doer of deeds could have done them better. The credit belongs to the man who's actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs, who comes short again and again because there is no effort without error and shortcoming, but who does actually strive to do the deeds, who knows great enthusiasm, the great devotions, who spends himself in a worthy cause, who at the best knows in the end the triumph of his achievement and who at the worst, if he fails, at least fails while daring greatly so that his place shall never be with those cold, intimate souls who neither know victory nor defeat.  God bless America and God bless us everyone. Ladies and gentlemen, please rise for the benediction. Let us pray. Almighty God, as we begin this new era of leadership, we ask for your benediction to rest upon us for continued success in our mission and safety in all our operations. As you have graciously preserved our nation through the years and have led us in wondrous ways, grant that we may be worthy of our high calling. Make us reverent in the use of freedom, just in the exercise of power, and generous in the protection of those less fortunate. Inspire the men and women who direct our Navy so that they may guide it wisely and well, especially do we pray for our former commanding officer as he moves to new responsibilities and for our new commanding officer.  Challenge each of us to recommit ourselves to the high principles of honor, courage and commitment for whether it is ours to lead or to follow, to end or to begin. We know that you are there besides us, oh God, and for your faithfulness we give you thanks. Amen. Please remain standing for the departure of the official party. Post and post aside, boys. Naval operations, departing. United States Navy, departing. Naval War College, departing. This concludes today's ceremony. Guests are cordially invited to attend a reception in Spruance Lobby and Culbert Plaza. Thank you.


Okay, today we're going to be looking at solving the hidden message from July 8th 2016 if you go to that video and Press play you can see the squealy QR code and what that is is a number of frames Which are all individual QR codes that go together. I've done this in a previous video But obviously there's more to it than that. Let's go ahead and grab the URL for this video and open up the shell And I'm going to download that video. I'm going to use YouTube dash DL to download that so if you don't have that installed install it or use whatever method you like to download YouTube videos next we need to extract all those frames. I'm going to use FFM peg I'm going to say use that video as an input and then as an output. I'm just going to call that image and I'm going to go Percent to dot PNG is going to create PNGs for each one And the percent two means make and put a number there. That's at least two digits There's only 91 frames in this video if there was more than a hundred you want to make it three You could have made it three basically if you don't do that And you number it one two three four They're going to be out of order when you try to decode them because it might go one ten eleven twelve You get what I'm saying. Hopefully you do Obviously I typed something wrong there. Let's go ahead clear the screen here and Oh, sorry percent two D There we go And we'll list this out and you can see all those images there We can open up my file manager. You can see they're all QR codes except for the very last frame ended up being a black frame That's important because when we go to decode you're going to notice. There's only 90 bar codes decoded because the last one Doesn't have one in it. So don't let that throw you off Okay at this point Let's clear the screen again. I'm gonna say Z bar IMG Which you'll have to have installed for this to work or use whatever application you like to decode bar codes I'm gonna say decode All the PNGs I'm gonna start playing that out and it starts show me what the code looks like now to the train die Such as myself right away. I will look at this and I would assume that it's base 64 or something similar Most likely base 64. What is base 64? I'll get into that in a moment The first thing I want to do here is I'm gonna dump all the base 64 code into a file But first I have to get rid of this QR code header part there that the Z bar image is putting into there for each Code it finds Obviously you could pipe it into cuts and remove that but a simpler way is dash dash raw option for Z bar Image and that will just say give me the raw data Next let's dump all that into a file. So I'll just redirect that and I'm just gonna put it into a file called M for message But you can call it whatever you want. I'll hit enter. It's gonna go through 91 frame So it's gonna take a moment. So let me talk about what base 64 is for those of you Don't know it is basically one of there's other types, but base 64 is probably the most common. You can take any file By no binary or not. It could be an MP3. It could be a wave file It could be a JPEG file a PNG file an application anything and it will turn it into ASCII basically typable characters if you ever look at the raw data from a email with Attachments the attachments are going to be in a base 64 format. That's how it's stored And then your web browser or whatever will decode it back into Whatever binary file it is same and then web browsers if you're creating HTML you can actually embed images in your HTML using base 64 so anyway, here we go it decoded and We got 90 from 90 from 90 and 91 images again the last one was a black image So I can clear the screen again and we can cat out that file. So there it is all You can tell if you if you work base. This is what base 64 looks like it always ends with the little equal signs It's pretty obvious that it's base 64 once you've seen it a couple of times. So at this point I want to decode the base 64 now base 64 is not an encryption It's an encoding so you don't need a pass or anything all you need is a program called base 64 Which if you're running Linux is Ori on your system. It's even built into busy box So if you're running like on a small arm device if it's not already there You can easily put it on there with busy box. Anyway Base 64 dash D for decode and I'm going to say M And if I hit enter it's going to output the original file decoded onto the screen Which right here you can see it is some sort of binary file and just kind of glancing at this You can kind of tell what it is looking at this right here But we need to put it into a file anyway. So again, we're gonna run base 64 dash D to decode name of the file And I'll just redirect that into a new file. I'll call it F for file Again, I already saw the binary output there So I kind of know just by glancing at that what type file it is But if you weren't sure because again, it could be a JPEG file a PNG file a wave file if it's a standard file Format, you know something common on all Linux systems every Linux system I've ever touched has the command file you give it a file name in this case F And it will tell you what type of file it is and right here. We can see it's an ELF 32-bit executable file for Linux. So basically this tells us that we know that this is a Linux executable It's 32 bit. I purposely compiled is 32 bit just to make it a little more compatible because most people have 64-bit machines, but 64-bit machines are usually backwards compatible ELF means Link file external link file. Basically, it's dynamically linked is what that's saying is that it requires some Libraries which are already on your system. Basically, this is a Linux executable file So there's a few things you can do with this So if you're on a Linux machine and you trust me that this isn't malicious code because there's no way for you to really know Whether this is malicious code you can run it through antivirus or something and as I've mentioned the past It's it antivirus isn't going to tell you whether something's a virus or not unless it's known And since I just created this antivirus isn't going to know whether it's a virus or not.  So I let's do that. I'll do it hex edit Oops hex edit the name of our file. I can tab over here hit for it http and Right here. You can see it's the URL Right here, but it's it's not straight. It's got things in between certain characters now Before I go any further Quit out of this Let's go back over here. I'm gonna show you the basic code So this is a little insight on how I created this executable. This is the exact same code Except for here. I put in my example here. I put hello world rather than URL now I could have just made a very basic I could have left out the strings header and just said print F and then the URL I Purposely didn't do that to make it a little bit harder for you So that when you go into a hex editor or use one of these other methods the string isn't all together I purposely put it in an array that loops through it so that it would be split up a little bit But you could still find the URL that way so one command that I use all the times called strings You can give it any file and it will remove anything. That's not a principle string So all the gobbledygook inside the executable and just give you the plain text So I can say that and then we can we can see that whole thing So that's all the plain text inside the executable, but we can grep for HTTP But you'll notice again all you're seeing is HTTP again if I just did print F With the string you would see the entire URL right here But since I split it up into an array it's split onto multiple lines Also, this is a 32-bit executable. So you're going to be see four characters Where if this was a 64 bit and you would see eight of the characters at a time But simple fix for this is use grep So string the file pipe it into grep and Then search for this and we're going to say dash capital a and I'll say 10 that says find HTTP in this file and show me that and the 10 lines after it and there you go is your URL split apart You just need to figure out exactly where it ends and you've got your URL Another option if you didn't know about the strings command is you can say grep dash IHTTP dash capital a or just just a and Then I don't know if that has to be over here. Usually I put that over here. So So dash a and what that's saying is I'm giving you a file.  So anyway Again, basically we downloaded the video made into images decoded the images, which was base 64 Oh, and if I didn't mention before Hey, I meant to So you might be going how was I supposed to know that space 64 again if you've worked with a 64 you recognize it But I always give you little hints because I want these to be difficult But I don't want them to be impossible in the actual video if you in your browser Look at the code of the page and look for the keywords tag The meta tag I gave you a little hints here that you're gonna use base 64 and I wrote QR code Because that's why I used to create the codes Z bar images what I used to decode it But those are little hints for those of you who might get a little stumped try to always check that So yeah downloaded made the images Z bar image raw to dump them into a file base 64 to decode it and Then file to figure out what type of file it was make it execute bone execute it or take one of these other methods if you didn't Didn't or couldn't execute it for some reason you can look at the data either using strings Grape or hex edit and that is it So thank you for watching. I hope you're enjoying these and in a few more days I'll put out another hidden video message and I guess I let's give a shout out to the people who made it At least the point of me Let's see so Open link Pause that this is the video that the thing brought you to so here are the people go ahead and look at these names These are the people who made it actually a lot of people. I thought this This this one was going to be a little more difficult Than previous ones, but people made it a lot of people made it surprisingly, which is great I love to see that so the next one Will be just a little bit harder. I think at least I thought this one was gonna be harder and more people made it So thanks to all these people who took the time to decode that message and find this hidden video Have a great day. Oh and visit films by Chris calm. That's Chris the cave. It should be a link in the description Also, you know support me patreon.com for session looks with the check all the links in the description for all that stuff I've talked enough have a great day


Item No. SCP-467 Object Class Safe Special Containment Procedures SCP-467 is currently located at site ██, and is guarded by a single security personnel, changed daily. Although SCP-467 has no true anomalous lasting effects, the information it reveals can lead people with lasting effects of their own. While SCP-467 is being studied or moved, all involved personnel must have no cell phones, pagers, or other communication devices on them without clearance for testing. Description SCP-467 appears to be an empty phone booth, and was found in ██. The SCP Foundation discovered it due to a legend about a haunted phone that used to reside inside the booth, although testing has revealed the phone was of no importance and the effects came from the booth itself. Even after the phone was removed, the booth itself remained a place of superstition before being recovered by ██, although there is nothing extraordinary about the booth itself, so long as a human and a communications device are in the booth at the same time, its effects are easily observed. These devices receive a message from somebody the user knows. This call shows no preference for friends, family, loved ones, co-workers, or even just acquaintances. Curiously enough, later examination of phone records or call logs revealed this call never happened, even though it may be observed and recorded. The caller has never even picked up the phone, in the process suggesting SCP-467 has a powerful form of telepathy. These calls divulge information that the user previously did not know, most commonly secrets and confessions. These calls range from insignificant to life-changing, see addendum. A single user may use the phone booth more than once, provided that at least 24 hours have passed since their last use. It is suggested that the booth not be used for personal reasons. Addendum, a collection of some of the more notable results have been collected, and is still being formed. Test log, 467-Varius Subject, nature of call, effects Subject, Class D personnel, convicted of multiple violent crimes. Nature of call, subject's mother, telling them that they were disappointed with what they had done, and admitting that they blamed themselves for not raising them right. Effects, subjects seem mildly disturbed for several hours, repeatedly asked to be allowed to contact family. Test requests was turned down. Subject, Class D personnel, convicted of homicide. Nature of call, subject received call from victim's family, saying that they never forgot, but they were slowly learning to forgive him. Effects, mild discomfort for several hours. Subject, Class D personnel, ██ nature of call. Effects, violent outbursts intermitted with hysterical sobbing. Test was terminated after an attack on nearby researchers. Subject, Class D personnel, nature of call, received a call from researcher present in the room at the moment, saying he thought the subject's haircut looked ridiculous. Effects, mild annoyance followed by amusement. Subject, Class D personnel, convicted of several counts of rape. Nature of call, victim of subject telling them they had managed to heal and grow past the crime since then, having started a family and working with women's rights organizations. Effects, subject was confused and admitted that he was not sure how to feel about that. A notable improvement in morale followed for several days. Subject, Dr. Rights, nature of call, unknown. Effects, moderate depression for approximately two days, intermitted with doubt regarding working with the Foundation. Full recovery followed. Subject, Dr. Iceberg, nature of call, unknown. Effects, no immediate effects. Two days later began an argument with a researcher at Site-17, which led to a mild physical conflict. Full reprimand followed. Incident report ██. Near holidays such as Thanksgiving and Christmas, a notable increase in disturbing or distressing calls have been observed. Theory currently holds that this is due to increased family tension and urges to be nice to people at this point in time. Additionally, it was during the holiday season that the first two reported incidents occurred of occupants inside 467 receiving a call from themselves, and other reported incidents of an occupant receiving a call from the deceased or non-existent. Further investigation pending on how personnel could lie to themselves and how SCP-467 received calls from non-existing sources. Subject, Class D personnel, nature of call, subject's own voice describing latent homosexuality.  Subject, Class D personnel, amnesiac testing subject, nature of call, subject's own voice explaining forgotten events prior to amnesiac testing. Effects, subjects seem moderately confused but show no other effects. Subject, Class D personnel, convicted of multiple counts of homicide. Nature of call, victim of subject, angrily screaming for five minutes.  Subject, Dr. Wrights. Nature of call, voice was described as that of a young child. Dr. Wright shut off the recording equipment after voice revealed to belong to ██████. Effects, ██████. Subject, Secretary of Security, staff break. Nature of call, Dr. Iceberg. Effects, ██████.