Contracts Across Coins
Smart Contracts for Bitcoin, Ripple and the altcoins
Stefan Thomas
CTO, Ripple Labs
In this talk...
Why Bitcoin needs smart contracts
Codius: smart contracts across coins
The end game: a more efficient lega...
Cryptocurrencies have
only solved half
of the payments puzzle
Push payments are like checks
We use pull payments every day
+
Additional Rules
Smart contracts enable pull payments
1. Translate rules to code
2. Securely identify code
3. Execute with non-colluding pa...
Where in the
software stack should
smart contracts
be executed?
Standard software architecture
User Interface
Business Logic
Database
e.g. HTML5/JS, Swing, mobile apps
e.g. J2EE, Node.js...
Distributed systems today
Client
Ledger
e.g. Multibit, Ripple Trade
e.g. Bitcoin, Ripple
???
Smart oracles: standard architecture
Client
Smart Oracle
Ledger
e.g. Multibit, Ripple Trade
e.g. Codius
e.g. Bitcoin, Ripp...
Codius: Flexible, powerful, inclusive
Any programming language
Any cryptocurrency network
Any web service
“Simple works, c...
Now we can execute
traditional contracts as
smart contracts
Contract
agreement with
conditional
penalties
=
We can easily encode contracts
try {
agreement
} catch {
penalties
}
Contract enforcement
How do we check the conditions?
How do we enforce the penalties?
Encode any agreement
pull payments escrow
insurance
auctions
crowdfunding
smart property securities
derivatives
equities
v...
End game: a more efficient legal
system
...from years of a lawsuit to a single click…
...from thousands or millions spent ...
Visit codius.org for the white paper!
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Contracts Across Coins - Smart Contracts for Bitcoin, Ripple and the altcoins

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Held at Coin Congress in San Francisco on Thursday, July 24th, 2014.

Codius is a set of tools for building smart contracts that work with any blockchain and even work with any other service connected to the Internet.

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  • why we care, how they’d work
    subscriptions, bills
    this is how credit cards work
    bitcoin really needs this
    push payments are like checks - PITA
    push is more cumbersome
    credit cards are insecure but we like the convenience of pull payments -- wouldn’t it be great if we could do them securely?
  • why we care, how they’d work
    subscriptions, bills
    this is how credit cards work
    bitcoin really needs this
    push payments are like checks - PITA
    push is more cumbersome
    credit cards are insecure but we like the convenience of pull payments -- wouldn’t it be great if we could do them securely?
  • make this work in a decentralized way
    pull payments are just some specific set of rules for who can access it
    (tie this to wallet controls like spending limits)
    cryptocurrencies have top and bottom layer,
    need middle layer to implement biz logic
    codius is that
  • - consensus networks need all changes to be agreed upon, difficult to get agreement about programming languages
    simple is good, decouple biz logic from ui and db layer
    (billing agnostic)
    emphasize why codius is different

  • A contract is: “An agreement that is enforceable by law.”
    Enforcement means that if the other party screws you, they have to pay you damages.
    preauth to draw money from the other person if they break the contract
    → Kind of pull payment with specific precondition
    can use bitcoin or ripple to make the payment - very efficient at that
  • A contract is: “An agreement that is enforceable by law.”
    Enforcement means that if the other party screws you, they have to pay you damages.
    preauth to draw money from the other person if they break the contract
    → Kind of pull payment with specific precondition
    can use bitcoin or ripple to make the payment - very efficient at that
  • A contract is: “An agreement that is enforceable by law.”
    Enforcement means that if the other party screws you, they have to pay you damages.
    preauth to draw money from the other person if they break the contract
    → Kind of pull payment with specific precondition
    can use bitcoin or ripple to make the payment - very efficient at that
  • Need to check the precondition - ways ranging from smart objects to a distributed task rabbit for checking things in the real world
    How to make sure the other person doesn’t just disappear? - most straightforward are escrow or insurance that will cover breach of contract (ask me more about this after)
  • enforcement we’re talking about is automatic instead of getting a lawyer who files a suit, etc…
    doesn’t handle all cases but you can handle the most common ones
    80/20 rule - this covers the 80% of the common cases
    layer between people and the current system
    cheaper, faster
    single click instead of years of a lawsuit
    pennies over thousands or millions in fees
    refine and tweak contracts over time
  • Contracts Across Coins - Smart Contracts for Bitcoin, Ripple and the altcoins

    1. 1. Contracts Across Coins Smart Contracts for Bitcoin, Ripple and the altcoins Stefan Thomas CTO, Ripple Labs
    2. 2. In this talk... Why Bitcoin needs smart contracts Codius: smart contracts across coins The end game: a more efficient legal system
    3. 3. Cryptocurrencies have only solved half of the payments puzzle
    4. 4. Push payments are like checks
    5. 5. We use pull payments every day + Additional Rules
    6. 6. Smart contracts enable pull payments 1. Translate rules to code 2. Securely identify code 3. Execute with non-colluding parties
    7. 7. Where in the software stack should smart contracts be executed?
    8. 8. Standard software architecture User Interface Business Logic Database e.g. HTML5/JS, Swing, mobile apps e.g. J2EE, Node.js, PHP e.g. MySQL, PostgreSQL
    9. 9. Distributed systems today Client Ledger e.g. Multibit, Ripple Trade e.g. Bitcoin, Ripple ???
    10. 10. Smart oracles: standard architecture Client Smart Oracle Ledger e.g. Multibit, Ripple Trade e.g. Codius e.g. Bitcoin, Ripple
    11. 11. Codius: Flexible, powerful, inclusive Any programming language Any cryptocurrency network Any web service “Simple works, complex fails.” – Timothy Ferriss
    12. 12. Now we can execute traditional contracts as smart contracts
    13. 13. Contract agreement with conditional penalties =
    14. 14. We can easily encode contracts try { agreement } catch { penalties }
    15. 15. Contract enforcement How do we check the conditions? How do we enforce the penalties?
    16. 16. Encode any agreement pull payments escrow insurance auctions crowdfunding smart property securities derivatives equities voting rental agreements spending limits
    17. 17. End game: a more efficient legal system ...from years of a lawsuit to a single click… ...from thousands or millions spent to dollars or pennies… ...smart contracts develop and improve over time...
    18. 18. Visit codius.org for the white paper!

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