Smart Contracts

Nick Szabo is a legend in the crypto space. A computer scientist from the University of Washington who was involved in the cypherpunk crypto community from the very early days in the 90’s, Szabo designed bit gold (Bitcoin’s precursor), and has been one of the guiding lights for Bitcoin development well before it was even devised.

Along the way during his prolific journey, Szabo became so interested in the idea of smart contracts that he went to law school and got a law degree in 2006 for a better understanding of the legal system. He was writing about smart contracts in 1997. The intrigue is encapsulated in Szabo’s words below:

History has seen successive revolutions in the costs of doing global business. First transportation, then manufacturing, and recently communications costs have fallen dramatically. Yet there are still major barriers to doing business internationally. The cost of doing business globally is increasingly dominated by issues of jurisdiction, security, and trust: the costs of developing, maintaining, and securing our relationships.

Despite the recent rise of global computer networks, our institutions still take for granted that we live in a world of paper. We formalize our relationships with written contracts, written laws, and forms designed for paper. Our attitudes and laws regarding intellectual property and privacy have assumed a world of paper which is costly to copy. Increasingly, we can no longer take these deeply embedded, highly evolved paper institutions for granted. Nor, since these institutions involve complex human relationships, can we redesign them overnight. We are entering a period where civilization must once again adapt to a radical new media.