Ethereum

Rights and Obligations are the 2 most fundamental building blocks of trade and finance. Contracts exist to protect rights and enforce obligations. Trade consists of trading one right or obligation for another.

They are also fundamental in understanding how Financial Systems, Blockchains and Smart Contracts work, yet most people haven’t really thought too much about what they actually work.

I believe it is vital to understand and think about these basic concepts to be able to successfully understand Bitcoin, Ethereum and eventually replace the traditional financial instruments and systems that are all based on this.

This article is a quick introduction rights and obligations and how to think about them in financial applications, in particular when writing Smart Contracts.

If you haven't read the first article in this series I recommend you go read it first: Ethereum vs Mossack Fonseca: The IBC and it’s blockchain alternatives

Trusts are an ancient contract structure going back to Roman days. A trust is used to separate control from the benefits of an asset.

Traditionally a trust is used by a rich father to ensure that his wealth is not spent away by his no-good spendthrift kids.

Whatever your opinions about the Panama Papers saga. There are both perfectly legitimate and absolutely illegal ways of using the services of an Offshore Trust company like Mossack Fonseca.

Ethereum through it’s Smart Contracts can actually replace many of the legitimate ways of using offshore structures, while at the same time make some of the illegal ways less useful.

As I discussed in my previous article From Contract to Smart Contract a Smart Contract is not necessarily a contract in it self.

If the Smart Contract is designed to be run 100% autonomously you don’t necessarily need what a normal legal contract offers you. But very few things live entirely on the block chain for now.

Smart Contracts as defined by Nick Szabo always fascinated me. I experimented with early versions of this, but Ethereum has finally come up with what looks like the first practical implementation.

This is the first in a series of articles about implementing Smart Contracts on Ethereum in the real world.