Smart Contract App’s philosophy
Recently we mentioned the things that hinder smart contracts from becoming our daily routine. Certainly, no smart contract can exist outside of its environment, where it can be created, verified, and performed. Certainly, Ethereum is a basic component thereof; however, a comprehensive environment shall include an interface for user interaction.
Of course, a command line is not the solution that a market could anticipate. A conceptual model of an application that could allow a wide range of users to employ smart contracts is todays focus of our interest.
For starters, we should define the scope of problems that our hypothetical app is set to solve. The most typical kinds of deals to be implemented in the application are as listed hereunder:
1. Trading operations with information rights;
2. IoT-compatible trading operations involving material assets;
3. Conclusion of service agreements;
4. Collective decision-making and performance of the decisions made (i.e., voting);
Now, let us delve into possible realization scenarios for each of those deals.
The most obvious use case of smart contracts is selling intellectual property, or, to put it more general, information as a whole. Say, a writer came up with a book, and now he or she wants to sell the publishing rights to a publisher.
First, both parties have to propose an initiative:
A seller provides a description of informational material in their application, cost thereof expressed in any currency of the world (regardless of whether it is virtual or fiat), an expected form of remuneration (also in any currency, which may differ from currency of the cost), as well as cost and public key of the receiver.
A buyer, in their turn, has to deposit the payment on an escrow account in any currency they deem convenient. This currency will be stored in escrow until the deal has been executed or cancelled. In this case, a transaction acts as an electronic signature. Thus, a smart contract is ready: a manifest on property exchange both digitally signed and confirmed (by a transaction in the blockchain).
Internet of things is about to offer even more exciting use cases. The concept allows one to address directly to the blockchain, which stores all data on a particular object that might identify itself with, say, an integrated RFID. The object may even be disconnected from the network, or even lack a power supply. For instance, Alice wishes to sell her used car to Bob; for that purpose she inserts a price she considers fair in the cars app on her smart phone used as digital registration certificate, or Bobs public identifier key. The smart contract is in fact hard coded in the cars physical key, which Alice gives away to Bob. Bob, in his turn, scans the contract-related data with his application using his own private key. It contains public data on Alices open key where the transaction shall be effected.
Until the physical key contains a pending contract (i.e., not executed, but not cancelled as well), the car wont start at all.
There is an alternate interesting method of selling a car. As soon as Alice marks it as available for sales, anyone might send a security deposit to a public escrow to implement a purchasing priority. Then Alice and Bob agree on time when the key is to be handed; the key by that time contains receiver data. Prior to handing the key Alice blocks the car and Bobs deposit (in a way which is irrevocable for her), hands the key to Bob, and he unlocks it in his app using the physical key he had just obtained. As soon as Bob unlocks the car, Alice receives a transaction containing the full amount of money. Thus, the sale can be performed remotely. Having locked the car, Alice might put the key in the glove compartment, and the car will drive itself to the new owner using automatic navigation and automatic charging stations.
When Alice blocks the car, the car owns itself until Bob unlocks it in his app. Theoretically, the car could take out a loan from a service like BTCjam, buy itself in from Alice, and go boozing like hell in the land of free cars, or earn a couple of billions more via Car as a Service.
Actually, smart contracts are plain escrow deals performed, say, at localbitcoins.com, while voting is regular multisignature transactions. The only difference is that they could be employed for management of various automatic systems, like deciding whether to finance a project in venture funds.
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