This was first presented on July 22, 2015 at Infosys in Mysore, India with the Blockchain University team. All citations and references can be found in the notes.

1. Defining Smart Contracts
Are they just marmots and bananas or actually useful?

2. “A smart contract is a computerized transaction protocol that executes
the terms of a contract. The general objectives of smart contract design
are to satisfy common contractual conditions (such as payment terms,
liens, confidentiality, and even enforcement), minimize exceptions both
malicious and accidental, and minimize the need for trusted
intermediaries. Related economic goals include lowering fraud loss,
arbitration and enforcement costs, and other transaction costs.”
- Nick Szabo, 1994

3. “Smart Contracts are contracts as program code, where the terms of
the contract are enforced by the logic of the program's execution. In a
series of steps, from the basic metaphor of contracts as board games,
through the nature of contract-created derivative rights, to
compositions of games to turn assets into capital, we explain how
smart contracts can resolve the conflict -- gaining the benefits of global
transferability without sacrificing local knowledge.”
- Mark S. Miller, 2003

4. • March 2014: Smart contracts are computer protocols that facilitate, verify,
execute and enforce the terms of a commercial agreement. (Great Chain of
Numbers)
• February 2015: A smart-contract is an event-driven program, with state, which
runs on a replicated, shared ledger and which can take custody over assets on
that ledger. (Richard Gendal Brown)
• April 2015: A smart contract is a simple rules engine; cryptographically assured
business logic that has the ability to execute and move value. (Consensus-as-a-
service)
• July 2015: A smart contract is: cryptographically verifiable execution of code over
cryptographically verifiable data. (Casey Kuhlman)
• July 2015: A smart contract is a computer program that directly controls digital
assets and which is run in such an environment that it can be trusted to faithfully
execute. (Vitalik Buterin)

5. “A smart contract is an administrative domain whose access policy is
given by the contract and enforced by the smart contracts' platform.
In the Ethereum case: the domain is the part of the state governed by
that contract (the account number, ether balance + nonce, storage) the
policy is the contract's code and Ethereum itself is the platform that
ensured the faithful execution of its policy over its domain.”
- Vlad Zamfir, researcher with Ethereum

6. “Many view smart contracts as code that emulates the logic
of contractual clauses. Is there consensus on this? In general, I think so
- but when you dive deeper, things get fuzzy. Should a smart contract
definition include the words "self-enforceable"?, should it be attached
to an oracle that allows it to "think" based on certain inputs? There's
different levels but on the surface I think people use it to describe all of
the above - most smart contract attempts today look like dumb
contracts and maybe a more specific terminology for smart contracts
will evolve out of progress. Maybe not.”
- James Duchenne, attorney, investor at 21 Capital

7. “Smart contracts are sets of computer codes that, essentially,
automate contractual functions among parties. They can resolve
disputes, accept and make payments, and verify compliance. They can
be self-policing but might not deal with all relationships among the
parties in as comprehensive a way as a legal, written contracts. In this
way, smart contracts may be both more than and less than ‘real’
contracts.”
- Stuart Hoegner, attorney and editor of “The Law of Bitcoin”

8. What does this look like?

11. Where can it potentially be used in the
financial industry?

13. What do a couple other projects look like?

14. In their own words

15. Tezos was developed by a group of financial professionals and researchers from INRIA, the French
Institute for Research in Computer Science and Automation.
By abstracting the concept of a blockchain and incorporating it into the protocol itself, Tezos
proposes a dynamic governance model which allows for some unique features:
• Stakeholders have full choice over the technological enhancements to the network.
• Integration of new features into the protocol as first class citizens, which preserves scalability and
composability. Tezos considers that this is a major advantage over solutions which implement new
features within smart contracts, and not at the protocol level.
• Network participants can agree to use any form of consensus mechanism.
A critical feature of Tezos’s offering is their smart contract language, which has full formal
specification. Tezos also provides “trustless off-chain contract arbitration,” which protects the
privacy of the parties to the contracts (while retaining auditability for regulators) and greatly
improves scalability.
Tezos
A self-amending cryptoledger

17. Eris in their own words
• Eris is a platform for building, testing, maintaining, and operating
distributed applications with a blockchain backend.
• Eris makes it easy and simple to wrangle the dragons of smart contract
blockchains. Eris drastically reduces complexity of operating and
developing blockchain-backed applications
• Smart Contract Focused:
• Distributed Infrastructure Focused – built to support both distributed user base
running the platform locally as well as larger enterprise operations departments
deploying to cloud droplets
• Blockchain Agnostic – works with (nearly) any existing blockchain, (nearly) any
existing “traditional” data management solution, as well as Eris built permissioned
ledgers
• Eris focusses on the “whole” application (see following slide)

18. Eris: Typical Blockchain Application

21. What other projects have contracting
“abilities?”
• Using the native ‘script’ language for Bitcoin, Mike Hearn has created several
examples including:
• Escrow and dispute mediation
• Assurance contracts (which he later evolved into “Lighthouse”)
• Trading across chains
• One of Ethereum’s goals is to enable end-users to use the network as a
contracting platform
• These can be written using a Turing-complete scripting language
• Several projects are using this including Spritzle and Etherplan
• In March 2014 there were a number of platforms that promised “smart contract
functionality,” but never really germinated
• For example: NXT, BitShares, Mastercoin (rebranded as Omni), Counterparty, and a myriad of
colored coin projects marketed this ability yet has not been fulfilled in scale
• Ripple Labs did create “Codius” but recently shuttered that effort

22. Practicum
• Jeff Flowers and Ryan Charles will give some coding examples of what
it looks like on the developer side of the equation

23. • tswanson@gmail.com
• Follow: @ofnumbers
• Visit: OfNumbers.com
Contact