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{{A|tech|}}Smart contracts cleave to [[Lawrence Lessig]]’s coinage [[Code is Law]] — you code legal rights into the electronic operating parameters between the parties: they physically constrain what you do to each other, rather than | {{A|tech|}}Smart contracts cleave to [[Lawrence Lessig]]’s coinage [[Code is Law]] — you code legal rights into the electronic operating parameters between the parties: they physically constrain what you do to each other, rather than being abstract metaphysical considerations agreed amongst lawyers, committed to paper, filed and forgotten, floating free, high above your messy actual interactions with your counterparty. Wouldn't it be great to code legal terms directly into your [[API]], so to speak, so everything was deterministic, automatic and utterly ''certain''? | ||
Notwithstanding breathless [[distributed ledger technology]] chat to the contrary, we’ve had [[smart contract|smart contracts]] for a while: wherever counterparties interact electronically, as they do when posting collateral under a [[CSA]], for example: it is the algorithms, thresholds and validation sub-routines embedded in the technological infrastructure, rather than the abstract ones set out in paper, that, in practical terms, govern what, when and how much collateral the parties exchange. Everything happens fast, deus ex machina, and there is no articled clerk with a quill monitoring the data flows and cross-checking each transfer against the agreed eligibility criteria written in the [[CSA]]. All of that coded into the machine. All a [[smart contract]] amounts to is the insight that that operational handshake, rather than the bit of paper you first wrote it down on, practically governs. It is no big leap to ditch the need for abstract textual reflections of operating parameters in separately executed "legal terms". | Notwithstanding breathless [[distributed ledger technology]] chat to the contrary, we’ve had [[smart contract|smart contracts]] for a while: wherever counterparties interact electronically, as they do when posting collateral under a [[CSA]], for example: it is the algorithms, thresholds and validation sub-routines embedded in the technological infrastructure, rather than the abstract ones set out in paper, that, in practical terms, govern what, when and how much collateral the parties exchange. Everything happens fast, deus ex machina, and there is no articled clerk with a quill monitoring the data flows and cross-checking each transfer against the agreed eligibility criteria written in the [[CSA]]. All of that coded into the machine. All a [[smart contract]] amounts to is the insight that that operational handshake, rather than the bit of paper you first wrote it down on, practically governs. It is no big leap to ditch the need for abstract textual reflections of operating parameters in separately executed "legal terms". | ||