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Smart contractjp smartcontract_about

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

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

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Smart contractjp smartcontract_about

  1. 1. What is smart contract? ~Basic presentation 1.Basis, 2.Usage, 3.Society~ Tomoaki Sato Smart Contract Japan 1
  2. 2. 1.Basis 2.Usage 3.Society of smart contracts Today, quickly go through 2
  3. 3. Basis 3
  4. 4. Smart Contract *much simplified 4Reference: https://github.com/ethereum/wiki/wiki/White-Paper
  5. 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 5
  6. 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? 6
  7. 7. Proof of agreement should Not • Be at one place 7 The Place
  8. 8. Proof of agreement should • Be at decentralised places 8 The Place
  9. 9. Before Blockchain age • No reliable replicated, consistent permissionless database system. • We need internet like replicated database system but there were not. 9
  10. 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. 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. 11
  12. 12. Usage 12
  13. 13. How can we use smart contracts? We have 2 choices. Directly or Via apps. 13
  14. 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. 14 references: http://ether.fund/ https://www.rocketlawyer.com/ https://www.prosper.com/
  15. 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. 15 references: http://ether.fund/ https://www.rocketlawyer.com/ https://www.prosper.com/ NxT based Smart Contract ServiceOn chain document timestamp service
  16. 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 ? 16 DApps = Decentralized Applications
  17. 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. 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. 18
  19. 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… 19
  20. 20. From Developer’s point of view 20
  21. 21. Society 21
  22. 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) 22
  23. 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 23
  24. 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. 24 Reference: Legality of Bitcoin by country, : Coindesk report 2013
  25. 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 25 Reference:Vitalik Buterin: Cryptoeconomic Protocols In the Context of Wider Society
  26. 26. Punishment for public good Public punishment also possible for those choosing the (0, 0) 26 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. 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. 28. Today we will research State of smart contracts
  29. 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 29 references: http://ether.fund/ https://www.rocketlawyer.com/ https://www.prosper.com/
  30. 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. 30 references: http://ether.fund/ https://www.rocketlawyer.com/ https://www.prosper.com/
  31. 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. 31 references: https://bitcoinmagazine.com/20985/ripple-discontinues-smart-contract-platform-codius-citing-small-market/
  32. 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. 32 references: http://hedgy.co/ http://hedgy.co/bitforward.html http://hedgy.co/bitlock.html
  33. 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 33 references: https://github.com/symbiont-io
  34. 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. 34 BitHalo: https://bithalo.org/update/
  35. 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. 35 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. 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. 36 reference: http://hyperledger.com/
  37. 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. 37 reference: https://erisindustries.com/
  38. 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 38 Ethereum wiki: https://github.com/ethereum/wiki We have nodes!

Editor's Notes

  • Smart Contract is suggested by Nick Szabo in 1997 from The idea of Smart Contracts
    At the time, there are problems to implement
    At first
    crypto graphic key for proving ownership.
    tokenize any assets in real world
    replicated databases
  • , because legal document should follow the rule which is defined by someone/org who defines it
  • Easy to be colluded
    someone bribe the place and persuade change the contract Easy to be lost
    single point of failure/ attack from outside of the world physically/internet
    Easy to be attacked.
  • 1.No one can delete it. You can imagine bittorrented your content. 2.The security is proved ECDSA ( Elastic Curve Digital Signature Algorithm)
  • 1. State based system, malicious person build many nodes for the current state and vote it.
    2. Transaction based system, malicious nodes change the past transactions
    So using computation power to prevent sybil attack for state based system, and order transactions by hashing previous transaction and blocks.
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • Smart properties
    Intellectual properties
    Company governance
    Domain name registries
  • - Land registry can be colluded, but if decentralised, no threat.
    - Why should we pay to the company for anonymizing my name ?
  • - Land registry can be colluded, but if decentralised, no threat.
  • But we should think about how we prevent bribing.
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company
  • We can trade Smart Contracts, just like you trade put/sell options, or buying life insurance from company

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