Where can Smart Contracts take us?

Dr. Gavin Woodco-founder, ethereum project

founder, ethcore limited

@gavofyork

Take a step back

A Contract is...

A document which defines a common understanding intended to be enforced

under law

“law”

A system of rules enforced with the intention of increasing certainty over interactions

“common”

Common langaugeMeaning (semantics) of the language must be same for all

UnambiguousAny given statement must have a single meaning

Known to all partiesAll parties must understand all aspects of the document

“understanding”

Described as one or a mix of:

ProcessSeries of steps to execute in response to circumstances

AssertionsSet of requirements to which all parties must be held

“enforced”

Words are cheap; Action is everything.Law (backed ultimately by physical force) makes the words actionable

Dispute possible; handled through externality

Private negotiation, pre-agreed arbitrator, court of law

Inefficiencies

Mostly paperSlow and heavy

Errors creep inCostly

Processes are stone ageExpensive lawyers required at every stage, often doing trivial “work”

Why? Certainty.Certainty, provided by large institutions, is costly. Cost becomes endemic.

The system of law...

...is a bit like a system of computation

Lawyers are electrons,institutions are silicon.

So... contracts?

Processes (understandings) are software

And the legal system?

crypto lawNecessarily means unpermissioned

Backed by nature, not by force

Differences

Contracts machine-accessibleReadable and executable by machines

Completely unambiguousThough flexibility can be definitely introduced if required

AutonomousAgreement and enactment are merged; (unarranged) disputes impossible

Repercussions

What did IT ever do for us?

Repercussions

Lower barriersCan be sliced, diced, remixed. Think mail -> e-mail -> facebook progression

Smaller, nimbler, more agileMicro-agreements become possible (µInsurance, µFinance, µLoans)

Near zero costsFew lawyers, increase certainty, better tools, more reuse;

many now non-viable uses become feasible

Repercussions

Agreements accessible, fast and cheapSimilar to the “like” button on Facebook or buying a Mars bar

Zero-cost proofsProof-of-Identity, Proof-of-Ownership, Proof-of-Provenance, ...

Difference of “internal” & “public” muddiedUber’s “employee-like” private service agreements is a portent

State of Play

BitcoinMinimal programmable functionality; mostly “crypto-finance”

EthereumTuring-complete, unlimited storage; “crypto-law”. First contracts being dev’d

Other chainsE.g. Ripple, NXT; mostly limited in scope or functionality

Problems and Solutions

ConfidentialityAll-omniscient problem. SSDAO, government, MPC, zk-SNARKS

InteroperabilityInterchain operation difficult; (partial-)solutions being imagined

InfrastructureLimited language available for contracts today compared to ”real world” law.

Need integration with identity, ownership, and data to add level of richness.

Where can Smart Contracts take us?

Dr. Gavin Wood@gavofyork

Questions?