The document provides an overview of smart contracts, including their basis, usage, and implications for society. It defines smart contracts as "proofs of agreement" that can be placed on a blockchain to be executed decentralizedly. Examples are given of direct uses like publishing smart contracts as tokens or using decentralized applications that run on smart contracts. Potential applications discussed include financial derivatives, insurance, voting, identity/reputation systems, and crowdfunding. The document also examines smart contracts from the perspective of developers and impacts on government and regulations.

1. What is smart contract?
~Basic presentation 1.Basis, 2.Usage, 3.Society~
Tomoaki Sato
Smart Contract Japan 1

2. 1.Basis
2.Usage
3.Society
of smart contracts
Today, quickly go through
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3. Basis
3

4. Smart Contract
*much simplified
4Reference: https://github.com/ethereum/wiki/wiki/White-Paper

5. Smart + Contract
• “Smart” means efficient.
• “Contract” doesn’t mean legal document, and it is
difficult for smart contract to be legal document.
• “Contract” means “Proof of Agreement”
* Notice there are many definitions for now
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6. Proof of Agreement ?
• Legally enforceable agreement is difficult to write.
• However, we need a lot of agreements in a daily
business.
• So if we have The Place to put agreements
between Things/Things, Humans/Things,
Humans/Humans, our life will be easier?
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7. Proof of agreement
should Not
• Be at one place
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The Place

8. Proof of agreement
should
• Be at decentralised places
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The Place

9. Before Blockchain age
• No reliable replicated, consistent permissionless
database system.
• We need internet like replicated database system but there
were not.
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10. After Blockchain age
• Now we have reliable time-ordered distributed
permissionless database like internet.
• Bitcoin proves Blockchain actually works.
From:https://bitcoin.org/bitcoin.pdf10

11. Again Smart Contract is
• Smart Contract is “Proof of Agreement”
• And basically, Smart Contract is on blockchain.
• To make it more useful from just proving
agereements, agreements are wanted to be
executed on Blockchain.
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12. Usage
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13. How can we use smart contracts?
We have 2 choices.
Directly or Via apps.
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14. Direct use
• Make, publish smart contracts, “Proof of Agreement” in decentralized
database.
• Trading smart contracts, sounds like trading tokens.
Proof of Agreement itself can be made, developed, traded.
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references:
http://ether.fund/
https://www.rocketlawyer.com/
https://www.prosper.com/

15. Such as
• Make, publish smart contracts, “Proof of Agreement” in decentralized database.
• Trading smart contracts, sounds like trading tokens.
Proof of Agreement itself can be made, developed, traded.
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references:
http://ether.fund/
https://www.rocketlawyer.com/
https://www.prosper.com/
NxT based Smart Contract ServiceOn chain document timestamp service

16. Or Use via DApps
• DApps is short-called Decentralised Applications, and in most cases using smart contracts
• Why ? because “Proof of Agreement” should be decentralized as we talked.
• So apps using smart contracts are ?
Yes, it is better to be decentralised for “Proof of Agreement”
Here is the reference about State of DApps on Ethereum
• So the app using smart contracts are ?
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DApps = Decentralized Applications

17. Such as
Here is the reference about State of DApps on Ethereum
• So the app using smart contracts are ?17
Decentralized Transportation system
Sharing economy to ride
Decentralized Prediction market
Decentralized POKER
ADEPT ~IBM & Samsung IoT app

18. Applications
• Financial Derivatives.
> Option trades are smart contract trades
• Insurance
> Insurances can be automated with trusted fact providers
• Voting
> Ban voting double time from one address easily. However currently it needs ID
& reputation system.
• ID & Reputation
> Economically creating ID or Reputation should be high cost.
By using smart contracts, they can be high cost.
• Crowdfunding
> Make your tokens and sell it to the crowd.
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19. From User’s point of view
1. No censorships
- From centralized servers.
2. Get revenue
- Cryptographic proof,
100% satisfied as smart contract.
3. Can play a many role, join in the app.
-Developer, Miner(Minter), Stake holder,
Smart Contractor(Legal), etc…
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20. From Developer’s point of view
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21. Society
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22. Government
• Will accept smart contracts as legal document ?
Or admit smart contracts as proof for legal level ?
• Generally if someone bribe the money to there, and can get more return from the
bribing, the function/ section is better to be more decentralised position,
Decentralized Centralized
Social authority
Financial system
Places for who
don’t have power
Voting system
Land registry
ID & Reputation system
Domain Name (ICANN)
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23. E.g. Developing countries
>"This also gives owners of the nearly 60 percent of undocumented
land, an incentive to register their property officially.” from REUTERS
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24. Regulations
• In many cases, smart contracts using cryptographic tokens, Bitcoin.
• And smart contracts will make localized rules. So one country can ban certain smart
contracts in the area.
• We focus on researches, not news, but legal information can’t be ignored in today’s
world, and is valuable to businesses.
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Reference: Legality of Bitcoin by country,
: Coindesk report 2013

25. Agreement for public good
• Make decentralised “Proof of Agreement”, at the same time moving from (A,
A) to (B, B) programatically. No body suffer (A, B) or (B, A) minus,
• Blockchain is good at Coordination, and Proof of Agreement.
Nuke No Nuke
Nuke 0, 0 1, -1
No Nuke -1, 1 1, 1
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Reference:Vitalik Buterin: Cryptoeconomic Protocols In the Context of Wider Society

26. Punishment for public good
Public punishment also possible for those
choosing the (0, 0)
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Nuke No Nuke
Nuke 0, 0 => -1, -1 1, -1
No Nuke -1, 1 1, 1
Reference:Vitalik Buterin: Cryptoeconomic Protocols In the Context of Wider Society

27. Research topics
Basis
• Relationships between Identification and “Proof of Agreement”. If there are no identification
system, what is possible/impossible by “Proof of Agreement” ?
• Bitcoin/ Ethereum difference, what applications would be affected by 3 things.1.Lack of Turing
Completeness, 2. Value-Blindness,3. Lack of state, 4. Blockchain-Blindness
• Next consensus algorithm especially for smart contracts.
• Zero knowledge proof and smart contracts relationships.
• How will Pre ID & Reputation Blockchain age services be changed to Post ID & Reputation
Blockchain age services?
Usage
• Business model of pure ‘Proof of Agreement’
• Business model of Decentralised Applications which using smart contracts.
Society
• Relationships between Identification and “Proof of Agreement”. If there are no identification
system, what is possible/impossible by “Proof of Agreement” ?
• Public good implementation ideas and to what that can be implemented in the society.
• Smartcontract local regulations, such as in Japan.

28. Today we will research
State of smart contracts

29. SmartContract.com
• Allowing move Bitcoin transactions, but the programmable agreement using
NxT in order to store data. One of the NxT merit is 2 minutes block time.
• Tradin smart contracts, sounds like trading tokens.
Escrow, stabilized payment, smart property on NxT
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references:
http://ether.fund/
https://www.rocketlawyer.com/
https://www.prosper.com/

30. Orisi
• Quorum way, have to trust some nodes, on
• Trading smart contracts, sounds like trading tokens.
Orisi is a distributed system of oracle nodes whichh validates smart contract safely.
Such contracts, unlike blockchain onu ones, can rely on external conditions ~from github.
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references:
http://ether.fund/
https://www.rocketlawyer.com/
https://www.prosper.com/

31. Codius
• Codius stops the development, because “Codius is just a way to make decentralization
easier” ~ from Bitcoin Magazine. There are small needs for the hosting.
• Not as decentarlized because of oracle needs, even if they have significant number of
inquiries they stop the development.
Codius is an open hosting protocol. It makes it very easy to upload a program.
~from Codius site.
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references: https://bitcoinmagazine.com/20985/ripple-discontinues-smart-contract-platform-codius-citing-small-market/

32. Hedgy
• They have 2 services for elimiinating Bitcoin Volatility with the use of smart derivative contracts.
1. BitForward, 2.BitLock
• 1. BitForward- Allows speculators to gain consistent exposure to the price movement of Bitcoin
without buying or selling the underlying asset.
• 2. BitLock Timelock in order to eliminate volatility, and using
various oracles to settle contracts automatically
To eliminate Bitcoin volatility using smart contracts.
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references:
http://hedgy.co/
http://hedgy.co/bitforward.html
http://hedgy.co/bitlock.html

33. Symbiont
• Counterparty Founder Adam Krallenstein is CTO and Founder of the team.
Medici project developers went to Symbiont, supported by former CEO at the NewYork Stock Exchange.
• 1. $1.25 mil raised.
• 2. Decentralized trading, p2p settlement, build in Escrow and clearing.
Symbiont is building the first issuance and trading
platform for smart securities on blockchain technology
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references: https://github.com/symbiont-io

34. BitHalo
• Without bloat.
• With easiness
BitHalo aims to allow users to use smart contracts on Bitcoin
blockchain, OS X, Window, Linux client has already released.
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BitHalo: https://bithalo.org/update/

35. Mirror
• Hedging and Risk Management for Bitcoin.
• Smart Financial Contracts.
• Problems for now, Transaction malleability, and normalised transaction Hardfork/Softfork for Bitcoin is needed.
Mirror aims to be smart contracts platform that
democratizes access to financial markets.
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Mirror: https://mirror.co/
Mirror Tech blog: https://medium.com/mirror-blog/why-bitcoin-transaction-malleability-is-still-a-problem-and-how-to-solve-it-89edbb47d4bf

36. Hyper Ledger (Digital Asset Holdings)
• Will be tens of thousands of transactions per second for financial transactions
• Trading smart contracts, sounds like trading tokens.
Hyper ledger don’t use crypto currencies at all.Their smart contracts will be run on
their asset manageement protocol hyper ledger.
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reference: http://hyperledger.com/

37. Eris Industries
• DB and Server they provides, then engineers don’t need to care about a lot of things.
• The founder, Casey Kuhlman is a lawyer and an engineer.
Eris industries make the foundation to develop DApps for
all engineers.
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reference: https://erisindustries.com/

38. Ethereum
• Wiki is the best place to know official information. https://github.com/ethereum/wiki
• You know many, you can write a contract easily as you write normal programming language.
• Also they have next wen3.x platform vision.
Ethereum is creating new blockchain, virtual machine, programming
language, for modular, stateful, turing-complete scripting contract platform
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Ethereum wiki: https://github.com/ethereum/wiki
We have nodes!