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Contracting-out Contract Law Importing Trust into Low-Trust Societies Electronically Mark S. Miller CTO, Combex Inc. Open Source Coordinator, ERights.org.

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Presentation on theme: "Contracting-out Contract Law Importing Trust into Low-Trust Societies Electronically Mark S. Miller CTO, Combex Inc. Open Source Coordinator, ERights.org."— Presentation transcript:

1 Contracting-out Contract Law Importing Trust into Low-Trust Societies Electronically Mark S. Miller CTO, Combex Inc. Open Source Coordinator, ERights.org Director, Extropy Institute

2 What Went Wrong? End of communism Great liberation from oppression New leaders include many free market folk Vaclav Klaus, Miseans in the Baltics, Poland, etc. Soros, others, eager to help It is easy to turn an aquarium into fish soup, but not so easy to turn fish soup back into an aquarium. –Lech Walesa

3 Low-Trust Societies From Trust, The Other Path, E. Dyson Absence of oppression isnt enough Complex extended cooperation requires trust Besides culture, what? Accumulated capital of widely trusted intermediary institutions Secures relationships & contracts among others

4 Hubs of High Trust ActualVirtual

5 Low-Trust Tragedy Not no trust. No trust hubs. ActualVirtual

6 Hubs: Trusted Intermediaries Arbitrators, Banks, Notaries, Visa, Underwriters, Lloyds, Sothebys, Exchanges, Brokers, Funds, Escrow, Consumer Reports, Roger Ebert, …, Courts, Law, Enforcement, Money yeah, but still better than their absence

7 Bits Without Borders Can now purchase e-goods & e-services from across the world as easily as next door. Escape old limits of geography & jurisdiction. Can trust-hubs escape too? Can they be made purely electronic? Mostly independent of physical interaction Many 1 st world hubs are trusted worldwide

8 Remote Trust Bootstrapping 1 st World3 rd World

9 Smart Contracts Contract as Program Code Terms enforced by programs execution Inescapable arrangement vs. punishment. Contract host == trusted escrow & enforcer Private law provided per-contract Nick Szabos Our Capability-based Financial Instruments at FC00

10 Contracts as Games Players make moves, but only legal ones Move changes state of board Board-state determines move legality ERights are pieces placed on board Game escrows pieces, Pieces/ERights released only by play

11 A Simple Exchange Game

12 A Covered Call Option

13 The Game Design Game Contract Negotiation as Game Design Framework as the Game of Game Design Design rules for game all are willing to play Write board manager for that game Agree on a mutually trusted host Pay host to run the board manager Host verifies everyone agreed on same game

14 World Isnt Purely Electronic Jurisdiction-freeLegacy-legal compatible Purely electronic rights (money, stock) 10/10 th of law9/10 th of law Public eTitle in physical goods (tractor, land) 1/10 th of lawMoral influence

15 Why the 3 rd World First? Less burden of installed base Like cell-phones in Eastern Europe. Where legal system isnt thought legitimate, legitimate businesses need not be legal. Especially given alternate source of legitimacy.

16 Rule of Law & Not of Men The Classical Liberal ideal A neutral simple framework of rules enforced impartially & justly enabling cooperation without vulnerability The old right of contract Any mutually acceptable arrangement Law secures it, as a trusted intermediary


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