This document discusses smart contracts and blockchains. It begins by defining a blockchain as a database maintained by a network of computers not owned by any single entity that stores transaction data in blocks organized sequentially in a chain. It then discusses how blockchains enable secure, traceable, and resilient transactions without requiring trust. The document outlines some uses of blockchains like virtual currencies, managing access to records, and building self-executing smart contracts using code on a blockchain. It also discusses some types of smart contracts being developed and limitations around self-enforcement, enforceability, privacy, and autonomy of smart contracts.
33. With identity, voting records,
securities, you can begin to use
smart contracts to digitize
corporate/LLC formations, equity
allocation, and distributions
63. ⢠Unless provided for in the code, smart
contracts lack the ability to be
breached and can be hard to amend
⢠Code immutably binds parties/devices
without leaving them the possibility of
unwinding the agreement, by virtue of
nature of smart contract
⢠Challenging questions for machine-to-
machine commerce and legal code
and unintended consequences
65. ⢠Courts have not yet affirmed the
enforceability of legal code
⢠Without absolute certainty, risk averse
parties may be justifiably reluctant to
enter into such agreements
⢠Questions of agency with machines
and devicesâi.e., manufacturer or
owners
66. Will need to back-up any legal code with
a human-readable version or wrapper
(known in financial cryptography circles
as a âRicardian Contractâ)
68. ⢠Blockchains/smart contracts are semi-
private
⢠Raises challenges for use cases,
where privacy can be a valuable
⢠Be careful when storing sensitive
information on a blockchain
70. ⢠Smart contracts, on systems like
Ethereum, can run autonomously
without human intervention, becoming
hard to stop
⢠They are viral in nature, which raises
questions as to what intermediaries
will be able to be leveraged to halt
their execution (miners, information
intermediaries, and/or programmers).
