Nick Szabo: The safest way to deploy smart contracts is through the Bitcoin blockchain

Will smart contracts make the world's lawyers unemployed? Not really, at least, that's not what Nick Szabo, the inventor of the concept of smart contracts, thinks.

Szabo gave a keynote speech on smart contracts at a smart contracts symposium at Microsoft’s New York headquarters this week.

In a talk attended by about 250 people (mostly from the Blockchain Trade Association, and the Digital Trade Association), Szabo not only touched on the potential benefits of smart contracts, but also on the limitations he currently sees.

He said:

“Lawyers are worried about losing their jobs to robots. In fact, what you are doing is probably not what smart contracts are supposed to do. Smart contracts are mainly doing new things that have not been done before.”

According to Szabo, the key difference between traditional contracts and smart contracts is that the logic of traditional law is based on "subjective" interpretations of analogies, while blockchain smart contracts are based on the "bit and logic" of布尔数学体系.

There is also a difference in global scale, he continued.

Traditional law has the concept of jurisdiction, which is defined by national borders and other dividing lines, while blockchain contract law can transcend national borders.

This results in traditional law being relatively flexible while still involving interpretation and judgment (thus, traditional law is not “dead”), whereas software versions of law are rigid and predictable.

“Traditional law is manually enforced, regional, and often uncertain,” Szabo said. “Public blockchains are automated, operate globally, and are predictable.”

While lawyers’ jobs may remain safe for now, other professions may not be so lucky, especially those with repetitive tasks.

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Although smart contracts are still in the earliest stages of development, large-scale failures can still help us understand which problems should be avoided.

In addition to commenting on the state of smart contracts, Szabo also discussed a paper titled “Smart Contracts: 12 Applications for Business and Beyond” during the event.

The paper, provided by the Smart Contracts Alliance, introduces the application of smart contracts in areas such as automatic record destruction and instant processing of automobile insurance.

The smart contracts mentioned in the paper range from contracts written entirely in code to "自然语言" contracts that use encoded payment mechanisms.

For Szabo, the most secure way to execute such contracts is through the Bitcoin blockchain, which he calls “the most reliable financial system ever deployed.”

Despite the current limitations of the Bitcoin network’s support for smart contracts, Szabo said:

“My personal favorite and most interesting smart contracts are those built in a peer-to-peer environment, from simple personal natural language to natural language running between individuals.”