1. Smart Contracts Presentation to ACC 18th October 2016 Sean Murphy

2. What
is a
blockchain?
How do
blockchains
operate?
What are the
benefits of
blockchains?
What are
smart
contracts?
How do
smart
contracts
work?

3. What is a blockchain? Third parties Party A’s lawyers
Party B’s lawyers
Party A
Party B
Party A’s bank
Party B’s bank
Land
registry
Shared ledger

4. A blockchain is a digital, distributed transaction ledger, with identical copies maintained on multiple computer systems controlled by different entities.
David Schatsky and Craig Muraskin, Beyond Bitcoin: Blockchain is Coming to Disrupt your Industry, Deloitte University Press, 2015

5. What makes up a blockchain?
Digital
Cryptography
Ledger
Platform:
www
Distributed:
shared
Consensus
not always
used
equals
> 50%
Component elements

6. What are the performance characteristics?
Time stamped
Immutable
No single point of failure
Irrevocable
Programmable
Transparency

7. What is a permissioned blockchain?
Different ledger technologies vary in their ‘degrees of centralisation’
Permissionless, Public, Shared Systems (eg Bitcoin)
Permissioned, Public, Shared Systems
Permissioned, Private, Shared Systems
Today’s Typical Systems
Distributed Ledger Technology Covers a Broad Set of Usages
Centralised Ledgers
100% Decentralised
100% Centralised
UK Government Chief Scientific Adviser, Government Office for Science, Distributed Ledger Technology: Beyond Blockchain, 2016

8. What is a smart contract?
I hear more and more people talking about ‘smart contracts’ these days. But when you push them to define the term, the concept often dissolves in their hands.
Richard Gendal Brown, A Simple Model for Smart Contracts, Gendal.me, 10 February 2015
A smart contract is a set of promises, specified in digital form, including protocols within which the parties perform on these promises.
Nick Szabo, Smart Contracts: Building Blocks for Digital Markets, 1996

9. How does a smart contract work?
Replicated, shared ledger - blockchain
“Smart contract”
Value
State
Events
Sending information to the contract
Transactions
Sending value to the contract
(reprinted here from Richard Gendal Brown, A Simple Model for Smart Contracts, 10 February 2015)

10. A spectrum of possibilities?
Contract entirely in code
Contract in code with separate natural language version
“Split” natural language contract with encoded performance
Natural language contract with encoded payment mechanism
Automation
Encoding Natural Language
Smart contracts lie on a spectrum
100% Code is Contract
Automated Performance

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