Ricardian Adaptive Smart Contracts (RASCs) at Work in the SciDex data marketplace
In 1994 the American computer scientist, Nick Szabo, introduced the concept of smart contracts, defined as a computerized transaction protocol that executes the terms of a contract. Smart contracts are able to fulfill common contractual conditions automatically without involving a third party’s approval and thus, operate a secure transaction whilst ensuring its track ability and irreversibility. It is an algorithm – it is very similar to a quantitative trading system, but can be executed for any business case.
However, smart contracts have yet to reach mainstream adoption for businesses due to:
• The complexity for businesses to generate, deploy and manage smart contracts is undeniable.
• Organizations are required by law to have a legal contract for every transaction performed.
• Smart contracts are encrypted and unreadable by humans
• Complex transactions are often dependent on the parameters and rules, which are defined in the contract.
Therefore, translating written contracts to smart contracts and making this process adaptive and automated at scale is necessary.
The SciDex protocol sets out to unlock smart contracts for businesses. It starts by enabling the translation of written to smart contracts, and ascends the complexity chart by adding additional trusted, secured and proven oracles, allowing the expression and execution of more complex transactions. It generates a Ricardian Adaptive Smart Contract (RASC) which is based on the following three pillars:
• Ricardian contracts - A set of digitally signed contracts readable by man and machine
• Adaptive - The ability for the protocol to generate contracts that change based on the parameters and rules of the written contract as well as the buyers profile.
• Smart Contract - The new hybrid smart contract designed for security, transparency and irreversibility.
Protocol: Bridging reality with blockchain – smart contracts aren’t pragmatic for organizations to use. The RASC can help follow the various rules of real-world data trading (RASC bring compliance to smart contracts – see details above).
The problem currently with existing use-cases of Blockchain technology is that they are mostly for the markets. Markets today, whether they are currency markets, stock markets, bond markets, or other markets – are completely electronic and mostly automated already (depending on how you calculate, figures show more than half of US Stock volume is algorithmic / automated). That means that Blockchain technology fits into electronic markets like a hat on a bald head.
But what about the real economy? This is where Blockchain gets tricky. The use cases of Blockchain are theoretically limitless, however practically a smart contract technology like RASC needs to be implemented in order to support real use cases in the real world based on business processes. Industries include logistics, legal, healthcare, education, manufacturing, government, information systems, and many, many others.
What we are talking about here is the automation of society. Smart contracts can be looked at as a type of software ‘robot’ that is, a process that happens automatically. But that must be codified programmatically. Making an algorithm is one thing, most businesses already run with algorithms (they call them ‘flow charts’) but programming them for automatic execution requires a robust structure like RASC.
In the Ricardian Contract “Bow Tie Diagram” we see the transformation from the ‘real world’ to the ‘digital world’ as depicted here:
Once the hash is created – manipulating and using the hash as an electronic actor in the Blockchain ecosystem is no different than is currently being used by Bitcoin and others.
The big question you may be asking is – if this is so simple, why hasn’t it been done before? The answer is that Bitcoin has awakened the world to the possibilities of digital automation and artificial intelligence, which you can say this is a part. While not intelligent as ‘thinking’ the process of handling smart contract requests is intelligence, even if the algorithm used is the most basic; identification and classification.
SciDex is on the path to create this system, which can revolutionize the world of process automation.