Total bitcoins over time. Source: Bitcoin WikiGenerating new coins is profitable in bitcoin right now, but this may not be the case in the future for some mining operations. In addition to generating revenue for confirming transactions, miners may find that hosting smart contracts is another lucrative venture down the road.
Said Thomas:
“Essentially miners are performing a validation function for the network in exchange for a reward, again a very similar concept as running a Codius host and being paid for running contracts.”
Legal ramifications
The use of smart contracts could solve not only the antiquated problems of using paper for legal purposes. It could also make legal systems around the globe more efficient should this technology be adopted.
Greg Kidd is Ripple Labs’ Chief Risk Operator, and worked at Promontory Financial Group prior to joining the company. He told CoinDesk:
“We see smart contracts as a layer between the contracting parties and the legal system. Right now, if anything goes wrong with a contract, you have to go to the legal system, which is extremely slow and expensive.”
Companies spend billions of dollars every year on various legal costs. Smart contracts might not be a solution for any sort of disputed situation. But Kidd, who previously worked with the Board of Governors at the Federal Reserve, thinks that the technology has promise to improve the broader legal system.
Traditional contract enforcement costs time and money. Source: Doingbusiness.org.“If you can write smart contracts that handle 50% of the possible ways that a given contract can go wrong, you can save 50% of the expected legal fees from entering the contract,” he said.
Development continues
There are already a few different cryptographic smart contract projects in various stages of development. One, called Ethereum, is still in the early developmental stages.
The same goes for colored coins, which act as a token on top of bitcoin. That effort has seen little industry traction so far, but a company called Coinprism is still trying to advocate its use.
“I’m waiting for an actual implementation. We are very excited about the opportunities arising out of smart contracts and other block chain technologies, but it’s early days,” said Fabio Federici, whose startup Coinalytics analyzes block chain data for its clients.
Nevertheless, the Codius white paper and its proposed use of Google’s Native Client to execute a small and secure base of code is novel. The applications Ripple Labs envisions for the Codius project are numerous. The list include tools that cover voting, escrow, derivatives, auctions, property and the equities markets.
In essence, smart contracts have the capability of innovating lawful agreements in a way similar to how cryptocurrency is changing existing concepts of money and value exchange.
Kidd, the Ripple Labs Chief Risk Officer, added:
“We’re interested in making antiquated systems such as payments, and legal vastly more efficient and democratic using distributed technology. Codius improves and opens access to the process of creating and executing legal agreements, so lawyers, judges, etc. can focus their energies on more complex cases.”
To learn more about Ripple labs, its architecture and its role in digital currency ecosystem, read our most recent report on the company here.
Technology and human image via Shutterstock
Codiuscontract enforcementNative ClientNick Szaboprogrammable contractssmart contracts
Original author: Daniel Cawrey