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Smart contracts are about programmable money and shifting the business logic for financial instruments from pages-long ISDA agreements to cryptographically-secu
by jackgavigan 11y ago
Smart contracts are about programmable money and shifting the business logic for financial instruments from pages-long ISDA agreements to cryptographically-secured and -enforced transactions on a blockchain. Today, settlement usually requires a trusted third party (TTP) and tedious, inefficient, expensive processes like netting, novation, moving money around, and keeping track of who owns what. Smart contracts holds out the possibility of being able to do away with the TTP and do pretty much everything on a blockchain.
- tracker1 11y agoHow does a blockchain help someone who delivered goods, but hasn't been paid? Or vice-versa?
- jackgavigan 11y agoThey could pay with a crypto-currency like Bitcoin or a fiat currency issued onto the blockchain (although the latter would require a TTP like a bank to issue the currency and allow holders to turn it back into "real world" money).
- tracker1 11y agoExactly... the upthread mentioned that you could do it without a TTP, and I just don't see how that would actually protect someone without it.