Thursday, 12 November 2015

FINTECH #LAW BEST #DECENTRALISED SMART-CONTRACTING #BLOCKCHAIN TOOLS

Dumping out over the week(s?) ahead, the best DECENTRALISED as well as centralised SMART CONTRACTING tools, exchanges, etc; first up, BITHALO

"‘Smart Contract’ is a phrase that single handedly promises to uproot some of the most ingrained institutions of past civilizations, answering the question of 'who owns what?' by digitizing, automating, decentralizing and cryptographically securing information.

Up until now, there's been a crucial problem at the heart of society and property rights. How can we know for certain that someone owns a piece of property at a given time, and has acquired it ethically and not through theft or fraud. In other words, how do we prevent the double spend of property?

A solution to this problem has evolved through the natural selection of ideas over centuries, resulting in what stable nation states tend to refer to as notaries, officials that are authorized to perform certain legal formalities. Notaries draw up or certify contracts, deeds, and other documents, they help record property ownership, that should be updated every time a property is sold.

This institution has been functional for those that can afford the costs of going to court to resolve property disputes, and for those lucky enough to have access to functional legal systems.

However as Brave New Coin readers are aware, the definition of 'legal' carries the emotional weight of 'morality,' which is very difficult to fully comprehend in today’s bureaucratically entangled democracies, not to mention the communist dictatorships of the east.

So complex is this web of laws, regulations, and federal carpet bombing of controls, that in 1980 the Department of Justice gave up counting each and every criminal law in the US, tallying up 3000 after two years. This does not count regulations or case law, which have the force of law. It is theorized that every person in the USA could be found guilty of three felonies every day, most likely without knowing it.

This entrenched bureaucracy has led to an industry of legislators, notaries, and regulators. On the flip side of the coin, the compliance industry is also booming, raising the costs of doing business dramatically. The Enterprise Governance, Risk, and Compliance Market is set to grow from US$15.98 Billion in 2015 to US$31.77 Billion by 2020.

But what if we could build parallel systems of common law, protocols that did not depend fully or partially on after the fact enforcement, but rather on prevention and cryptographically enforceable contracts, sovereign to cypher space?

Nick Szabo, Smart Contract pioneer and computer scientist, argues that “Legal barriers are the most severe costs of doing business across many jurisdictions.”

“Smart contracts can cut through this Gordian knot of jurisdictions. Where smart contracts can increase privity, they can decrease vulnerability to capricious jurisdictions. Where smart contracts can increase observability or verifiability, they can decrease dependence on these obscure local legal codes and enforcement traditions.”

- Nick Szabo

To this end the lead developer of Halo, David Zimbeck, has created what may be the purest of smart contracts. This is a decentralized, peer-to-peer contracting mechanism, which he argues is “the only way strangers can trust each other.”

The essence of Halo is fairly simple."

Continues.

Sources

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