Presentation given at European blockchain conference.

1. Where can Smart
Contracts take us?
Dr. Gavin Wood
co-founder, ethereum project
founder, ethcore limited
@gavofyork

2. Take a step back

3. A Contract is...
A document which defines a common
understanding intended to be enforced
under law

4. “law”
A system of rules enforced with the intention
of increasing certainty over interactions

5. “common”
Common langauge
Meaning (semantics) of the language must be same for all
Unambiguous
Any given statement must have a single meaning
Known to all parties
All parties must understand all aspects of the document

6. “understanding”
Described as one or a mix of:
Process
Series of steps to execute in response to circumstances
Assertions
Set of requirements to which all parties must be held

7. “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

8. Inefficiencies
Mostly paper
Slow and heavy
Errors creep in
Costly
Processes are stone age
Expensive lawyers required at every stage, often doing trivial “work”
Why? Certainty.
Certainty, provided by large institutions, is costly. Cost becomes endemic.

9. The system of law...
...is a bit like a system of computation
Lawyers are electrons,
institutions are silicon.

10. So... contracts?
Processes (understandings) are software

11. And the legal system?
crypto law
Necessarily means unpermissioned
Backed by nature, not by force

12. Differences
Contracts machine-accessible
Readable and executable by machines
Completely unambiguous
Though flexibility can be definitely introduced if required
Autonomous
Agreement and enactment are merged; (unarranged) disputes impossible

13. Repercussions
What did IT ever do for us?

14. Repercussions
Lower barriers
Can be sliced, diced, remixed. Think mail -> e-mail -> facebook progression
Smaller, nimbler, more agile
Micro-agreements become possible (µInsurance, µFinance, µLoans)
Near zero costs
Few lawyers, increase certainty, better tools, more reuse;
many now non-viable uses become feasible

15. Repercussions
Agreements accessible, fast and cheap
Similar to the “like” button on Facebook or buying a Mars bar
Zero-cost proofs
Proof-of-Identity, Proof-of-Ownership, Proof-of-Provenance, ...
Difference of “internal” & “public” muddied
Uber’s “employee-like” private service agreements is a portent

16. State of Play
Bitcoin
Minimal programmable functionality; mostly “crypto-finance”
Ethereum
Turing-complete, unlimited storage; “crypto-law”. First contracts being dev’d
Other chains
E.g. Ripple, NXT; mostly limited in scope or functionality

17. Problems and Solutions
Confidentiality
All-omniscient problem. SSDAO, government, MPC, zk-SNARKS
Interoperability
Interchain operation difficult; (partial-)solutions being imagined
Infrastructure
Limited language available for contracts today compared to ”real world” law.
Need integration with identity, ownership, and data to add level of richness.

18. Where can Smart Contracts take us?
Dr. Gavin Wood
@gavofyork
Questions?