Smart Contracts and their ability to completely change the financial world

Is Jow Forums ready for a serious discussion about the upcoming largest technological revolution the world has seen to date?

What are Smart contracts?
Per Wikipedia, "A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible."
Essentially, A smart contract is protocol that can execute automatically and on its own, without human intervention. Think automation of jobs through technology, Smart Contracts will be the front runner to the automation of data entry level jobs currently being performed by humans.

So Imagine a contract set up that automatically pays you, a worker at a company, X amount of dollars every hour/day/week of work that you are clocked in, straight to your bank account. With this, you can add a taxation function automatically taxing your income. This is all done automatically, without the need of a middleman or without a centralized service, only needing a small data retrieval fee(could be as low as $0.0025 or as high as $0.5).

Now, this is a very simple and rudimentary use case for smart contracts. Lets get into the more complex use cases:

Attached: DII_VisualisierungContract.png (720x443, 121K)

Other urls found in this thread:

slatestarcodex.com/2016/05/30/ascended-economy/
reuters.com/article/us-fidelity-blockchain/fidelity-becomes-first-asset-manager-to-join-blockchain-group-ic3-idUSKBN17C0AV
worldcryptoindex.com/jp-morgan-issues-worlds-first-smart-contract-cd-quorum-blockchain/
treasury-management.com/news/1024/poc-of-swift-smart-contract-trade-w-5-financial-firms.html
azure.microsoft.com/en-us/blog/introducing-enterprise-smart-contracts/
twitter.com/NSFWRedditVideo

Lets take a quick look at Trade Financing, Where financial institutions provide credit facilities in order to guarantee exchange of goods. In 2015 alone, the trade finance market was measured at more than $10 trillion USD.

Trade Finance is a very complex process. At the moment buyers and suppliers use a letter of credit typically concluded by physically transferring paper documents to underpin transactions. This process however creates a long paper trail and it may take between five and ten days to exchange documentation. Payment method and instrument automation enabled by smart contracts provides risk mitigation and improved financing and process efficiencies for buyers, suppliers and financial institutions. This means:
-Faster approval and payment initiation through automated compliance and monitoring of Letter of Credit conditions.
-Improved efficiency in creating, modifying and validating trade, title and transport-related contract agreements.
-Increased liquidity of financial assets due to ease of transfer and fraud reduction.

see pic related

Attached: 4b10e33f223351a6a57c5613d14121b6.png (724x280, 64K)

I'd rather talk about how one of the ethereum ceos got outed as a pedophile

What else can Smart contracts do? Lets take a look at Auto Insurance. Automated insurance claims enabled by smart contracts provide instantaneous processing, verification and payment by vehicles that are able to communicate with each other and assess and validate their own condition. Currently, the car insurance claims process is disjointed, but the
process can be improved significantly through smart contracts. The smart contract records the policy, driving record and reports of all
drivers, enabling Internet of Things-equipped vehicles to execute initial claims shortly after an accident, “self-awareness” and damage assessment using sensors can execute initial insurance claims/police reports.

Attached: a53865f3825bf09806c894a43dc8b32a.png (721x279, 45K)

endgame: slatestarcodex.com/2016/05/30/ascended-economy/

The singularity is coming. And there is nothing you can do to stop it.

>irreversible
there's your problem

Duh
>Anywhere short of the bionic horizon, where human history loses traditional intelligibility, the alternative to business-for-business (or involutionary, intelligenic capitalism) is monkey business — the subordination of the economy / technology to discernible human purposes. Evolutionary psychology teaches us what to expect from this: sex-selected status competition, sublimated into political hierarchies. The emperor’s harem is the ultimate human purpose of pre-capitalist social order, with significant variety in specific form, but extreme generality of basic Darwinian pattern. Since capitalism did not arise from abstract intelligence, but instead from a concrete human social organization, it necessarily disguises itself as better monkey business, until it can take off elsewhere. ...

The fact that it is irreversible is a plus. Now neither party can fall back on their word and the contract will execute as agreed upon previously.

so, i'm actually pretty interested in this, and great thread so far. i saw this an hour ago but couldn't reply where I was, so here goes

I am curious if they're going to be able to emulate hardware, or to use CPU power from around the world to solve meaningful problems, not just random ones in the mining process. What if there was a computer built on blockchain, and all the miners were actually distributed pieces of the hardware of a machine?.. like could I write a dapp that uses a global distributed computer to solve huge problems faster than a microsoft data center which would be centralized? then we could have like a community owned AI.. all kinds of crazyness there

What are the steps to distributed computing over blockchain? i know as of now (at least in ethererum) there are nodes that compute instructions, then compare results with each other.. what if they broke the problem into segments and distributed the work? then, we get hardware emulaion, and entire OSes written on top of programmable blockchains. Is my head in the clouds with this??

They can be set to allow back outs, you set rules for backing out before hand, agree upon them, then if you meet the criteria the contract can be backed out of. doesn't HAVE to be irreversible.

you mean like a fucking block chain? what are you trying to meme about? you haven't made a point about anything revolutionary or that doesnt already exist

Absolutely retarded and shows no comprehension of contract law.

t. a lawfag

Dapps already exist to emulate hardware, like data storage on chain to emulate hard drives. Questions involving AI is relevant although to far in the future to really call at the moment.
>what if they broke the problem into segments and distributed the work?
This question is still being answered. Only time will tell.

Yes think blockchain and the advantages that come with using a decentralized service. Now take that technology and apply it to stocks/bonds, which we already see the start of with tokenized assets. Now take that even further beyond tokenized assets using smart contracts for a plethora of business use cases with the introduction of secure smart contract oracles.

if it was not so revolutionary, why are the largest financial institutions in the world investing heavily into their futures?

Fidelity Labs:
reuters.com/article/us-fidelity-blockchain/fidelity-becomes-first-asset-manager-to-join-blockchain-group-ic3-idUSKBN17C0AV

JP Morgan:
worldcryptoindex.com/jp-morgan-issues-worlds-first-smart-contract-cd-quorum-blockchain/

SWIFT:
treasury-management.com/news/1024/poc-of-swift-smart-contract-trade-w-5-financial-firms.html

Microsoft:
azure.microsoft.com/en-us/blog/introducing-enterprise-smart-contracts/

Your job will be automated as well and there is nothing you can do about it. Don't worry, there are plenty in the same boat as you.

>it does literally the same thing as now

so why would companies invest in this shit?

Go back to your containment board

>Your job will be automated as well and there is nothing you can do about it.

Proves you know nothing of law.

Because With a decentralized system, companies can save Billions by not needing to hire human labor and automating certain processes. Of course, this is not going to happen over night and requires a massive overhaul of current protocols, but companies will be forced to switch to the method that saves money in order to be competitive in a capitalistic scene.

The singularity is nigh. 20 years from now lets see if you share the same sentiment.

>companies would exchange huge amounts of money through an irreversible and uncontrollable entity
>kek

some form of smart contracts might be used eventually but it wont be decentralized and it sure as shit won't be some internet meme coin that was made by pajeets

that dude is a brainlet stop replying to him. (03)

ABout the HW. wouldn't it be nice to have a ;linux kernel ported to some blockchain. they have to port assembly and C for it to work i'm guessing.. not a programmer here..

>companies would exchange huge amounts of money through an irreversible and uncontrollable entity

So the biggest advantages to this sort of technology can be seen best under a network affect were multiple companies are using a sort of standardized infrastructure (think HTTP protocols and such). A network effect is extremely important when dealing with a decentralized system. The larger the network the more nodes, and in the case of smart contracts, the more oracles providing data to them.

With that in mind, the logical step would be to have these nodes, acting as a decentralized network of oracles, provide some sort of collateral in case the contract is wrongfully paid out. So the nodes would put up X amount of dollars before the contract is executed, and should the contract wrongfully execute, the node operators would pay with their collateral as a form of insurance. The larger the network, the more nodes, the less each individual node has to pay collateral etc.

contd. also would need to emulate the hardware, could trim down on drivers for the kernel tho, because the blockchain HW will be pretty standardized i bet... unless... woah

This is in no way related to the underlying technology. You sound like a person that likes CoCs.

then it is no longer decentralized.

>ranjesh

yea but it seems as if youre asking existential questions about the possibilities of these giant networks. I tend to try and cross the bridge when I get there.

>then it is no longer decentralized.

What? I just described a giant, standardized network operating in a decentralized manner.

>standardized network operating in a decentralized manner.

Lol

eth is a depreciated shitcoin

yes I do tend to let my mind wander about cool shit, i love scifi and stuff.. anyways I follow IOHK they have some good technical stuff and seem to be on the bleeding edge of the research in this. what do you think of htem?

I do like IOHK and the work they do but I am more interested in the idea of Oracles. Right now, smart contracts are very limited in what they can accomplish because they have no knowledge of anything happening off chain. Working Oracles that can bring information onto a smart contract safely and securely is the most exciting aspect.

Isn't IOHK sort of doing that by trying to get their chain to navigate other blockchains?

are you talking about interoperability between blockchains?

yes sir.

ALso, i don't follow 'link' but the gist i get is they want to create a db system.. anyways, the projects that do the domain name resolution, IPFS, etc are pretty based and redpilled.

Do you write in solidity or something similar?

IOHK has projects addressing issues like scaleability and interoperability between blockchains, but not working on a form of oracles to bring outside data on chain. There are also other projects working on interoperability, AION and ARK if I recall.

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Ill look into the oracles thing, first i've heard of it. What kind of data would be necesarry to be off blockchain, and would it involve security issues?

>decide to use smart contracts
>bug in contract rekts you
>immutable so can't be fixed
>bug in interpreter/vm running contract is buggy
>maybe fixable, still get btfo'd.
>have to waste shit loads of electricity in shitcoin retardation proof of work

none of this sounds better than just having a third party and some kind of human based arbitration or trial for conflicts.

yeah and I bet you're one of those cucks that wants to drive his own car in the future too...

they're paid to shill here. just let them earn their shekels and leave

>What kind of data would be necesarry to be off blockchain

It can be endless. For a simple example, Oracles aggregate the mean price of a stock/bond/crypto from multiple exchanges.

>and would it involve security issues?
security is top priority. You would not want a contract to wrongfully execute with false information.

wish I was getting paid for this. I genuinely enjoy talking about it.

no, not really. but treating finances as some edgy, zero trust network is an expensively retarded meme that solves literally fuck all.

It'd be better to put this research into better unification of IT systems if you really want more automation and lower costs.

yeah but making shill posts for shitcoinX is not talking about smart contract technology, it's level 0 word spamming to catch fomo investors attention.

oh i see!! that's super obviously necessary i just was missing it. not a programmer more sys admin background here so that's why i'm thinking about gigantic distributed powerful networks owned by community..