{"id":29412,"date":"2017-01-14T00:00:00","date_gmt":"2017-01-13T11:00:00","guid":{"rendered":"https:\/\/bravenewcoin.com\/insights\/upgrading-smart-contracts-to-wise-contracts\/"},"modified":"2023-11-27T19:29:27","modified_gmt":"2023-11-27T06:29:27","slug":"upgrading-smart-contracts-to-wise-contracts","status":"publish","type":"post","link":"https:\/\/bravenewcoin.com\/insights\/upgrading-smart-contracts-to-wise-contracts","title":{"rendered":"Upgrading ‘Smart Contracts’ to ‘Wise Contracts’"},"content":{"rendered":"

\u201cSmart contracts\u201d is a phrase which is often difficult to define<\/a>. Let me help: a \u201csmart contract\u201d is a contract which enforces itself! Nick Szabo gave the example of a vending machine. You insert the money, and the machine lets you take back either [1] your money, or [2] some merchandise.<\/p>\n

Cryptography: Very Very Smart<\/h3>\n

Szabo\u2019s vending machine is not quite as \u201csmart\u201d as it could be \u2013according to our \u201cself-executing\u201d definition\u2013 because someone can steal the items (by smashing the glass or tipping the machine over), or disable the machine (by unplugging it). Ultimately, there\u2019s \u201cdumbness\u201d to the contract, because it (the machine) doesn\u2019t completely<\/em> execute itself. The machine relies on the building for power, on courts\/police for protection, and on other individuals to maintain it, stock it, and collect money from it, and so forth.<\/p>\n

In contrast, cryptography allows one to construct rules which are literally unbreakable<\/em>.<\/p>\n

It is really quite extraordinary: one human \u201cmaking\u201d something that no human can \u201cunmake\u201d.<\/p>\n

Originally, crypto could only protect files (by putting them in metaphorical safes or envelopes). But it later progressed to digital identities, and ultimately, payments (ie Bitcoin). Since Bitcoin is peer-to-peer, it is itself<\/em> a smart contract, in the sense that, if you turn it on, no one else<\/em> can turn it off<\/a>. A single peer can regenerate (or even maintain) the entire network.<\/p>\n

As a result, the post-Bitcoin era is one where Szabo\u2019s vending machine can be much more powerful. The physical \u201cmachine\u201d is unbreakable \u2013the glass cannot even be scratched, if all the world\u2019s armies were to turn and fire at once\u2013, the machine cannot be cheated or deprogrammed, it will always operate with perfect reliability all the time, and it cannot be unplugged (because the customers power it, by pressing the buttons).<\/p>\n

Examples of Cryptographic Smart Contracts<\/h3>\n

These include:<\/p>\n