►
From YouTube: Agoric + Protocol Labs // Smart Contracts - Where They've Been & Where They're Going - Bill Tulloh
Description
The idea of smart contracts has roots that go back to work in the 1980s and crystalizing as a concept with Nick Szabo in the 1990s. This talk traces the history of smart contracts and draws lessons from this to suggest where they are headed.
A
Hi,
my
name
is
Bill
Tala
I'm,
a
co-founder
and
economist
at
a
gorrik,
and
what
I
wanted
to
talk
to
you
today
about
today
is
the
history
of
smart
contracts
and,
in
particular
the
pre
blockchain
history
of
smart
contracts.
I
think
we
know
a
lot
about
the
story
of
the
different
efforts
to
create
digital
currencies
that
led
up
to
the
creation
of
Bitcoin,
as
well
as
the
innovations
in
cryptography
and
visiting
fault,
tolerant,
distributed
systems
that
made
that
possible,
but
I
think
the
much
less
is
known
about
the
early
history
of
smart
contracts
and
I.
A
Think
that's
a
pity,
because
it's
an
interesting
story.
I
also
think
that
there's
maybe
some
lessons.
We
can
still
learn
from
it
and
it
was
a
story
that
was
fortunate
to
be
involved
with
tanned
with
and
play
a
small
part
in.
So
this
we're
going
to
talk
to
you
this
evening
and
I
really
want
to
cover
three
things.
First,
is
what
I
call
web
zero,
which
states
back
to
1988
roughly
through
the
early
90s,
which
was
really
attempt
pre-web
to
visualize
and
build
what
this
interconnected
world
that
we
find
ourselves
living
in
today?
A
Then?
Next
I
want
to
talk
about
the
smart
calling
here,
the
smart
contract
pioneers.
These
were
moving
forward
a
bit
time
to
the
mid
nineties
on
into
the
early
2000s,
and
this
is
really
an
effort
to
figure
out
what
our
smart
contracts
and
what
technologies
we
need
to
in
order
to
build
them
and
it.
Finally,
just
gonna
conclude
with
a
little
bit
of
what
I
call
the
smart
contract
stack
to
maybe
pull
out
some
of
the
lessons
from
that.
A
So
before
I
dive
into
that
I
just
posted
what
is
a
smart
contract?
This
is
the
same
as
what
hate
you
someone
go
into
it
very
much
but
you're.
Basically,
we
we
mean
a
contract
like
arrangement,
there's
a
forcible
by
code.
I
think
what's
different
here
is
or
what's
special
here
is.
It
makes
it
different
than
some
ordinary,
run-of-the-mill
program.
Is
that
there's
multiple
parties
with
multiple
diverse
interests
involved?
These
parties
don't
have
mutual
trust
amongst
each
other.
These
are
often
cases
where
you're
exchanging
something
with
somebody
have
some
stranger
halfway
around
the
world.
A
A
Let
me
sort
of
put
that
in
some
context
is
first
of
all
the
web
1.
The
technology
started
emergent
in
the
early
90s
for
the
World
Wide
Web,
but
really
took
hold
about
1995.
That's
when
I
really
started
to
take
off.
It's
probably
best
illustrated
by
Netscape
super
successful
IPO
of
that
year
and
really
ran
up
to
the
dot-com
bust
in
2001,
and
this
is
course
you
know
generated
all
sorts
of
crazy
excitement,
not
too
different
in
many
ways
from
today,
but
then
in
2001
with
the
bust
and
a
lot
of
companies
going
bankrupt.
A
There
were
many
who
thought
that.
Well,
this
shows
that
you're
not
actually
much
to
this
web
worldwide
web
story,
and
so
the
web
2
movement
sort
of
started
afterwards,
which
was
saying
no
there's
some
really
useful
stuff
here
and
you're
now
being
able
to
build
richer
web
and
environments
and
and
create
a
more
participatory
web.
A
This
also
had
their
big
IPO,
which
was
probably
best
represented
by
Google's
and
in
2004
and
super
successful,
but
unfortunately,
something
went
wrong
along
the
way-
and
this
is
this.
The
advertising
driven
model
combined
with
network
effects,
has
led
to
this
very
creepy
world.
We
live
in
of
where
the
business
models
depend
on
surveillance
economics,
hence
the
need
for
web
3,
but
I
wanna
talk
about
web
0,
so
what
I
mean
by
web
0?
A
So
I
want
to
dive
back
in
to
tell
very
personal
story,
which
was
my
summer
vacation
in
1989
in
1989.
I
was
a
graduate
student
economics
at
the
Virginia
I
had
stumbled
across
some
work
by
some
computer
people
out
here
who
are
applying
the
economics.
I
was
studying
two
computer
systems,
I
found
that
fascinating,
showed
it
to
my
professor
and
before
I
knew
it
I
was
on
the
plane
out
to
San
Francisco
to
meet
with
these
people.
A
It
was
a
remarkable
experience.
It
was
one
of
those
rare
moments
in
my
life,
where
I
really
felt
like
somebody
had
pulled
back
the
curtain
that
separates
the
present
from
the
future
and
gave
me
a
glimpse
of
things
to
come.
That
doesn't
happen
very
often,
but
I
realized
that,
for
many
of
you,
you
weren't
even
born
back,
then
so
I
needed
a
little
bit
of
paint.
The
picture
of
what
that
was
like
beforehand
and.
A
For
delighted
to
see
what
the
people
who
came
to
visit,
we
called
the
Xanadu,
the
ZeniMax
community,
and
it
was
really
centered
down
around
to
startup
companies
down
in
Palo
Alto
one
was
the
Xanadu
operating
company
and
the
other
was
annex
the
American
information
exchange.
Both
were
funded
back
then
by
Autodesk,
and
they
shared
a
common
parking
lot
and
a
vision
for
a
decentralized,
interconnected
future.
A
But
when
I
went
out
there
I
mean
this.
Is
this
extraordinary
group
of
people?
It
consisted
of
entrepreneurs,
programmers
cryptographers
visionaries,
but
the
world
I
was
coming
from
was
very
different.
This
was
in
1989,
so
we're
definitely
talking
for
you
blockchain,
overall,
so
pre-web
and
in
many
ways
we
were
pre
internet.
The
internet
protocols
existed,
but
commercialization
didn't
occur
until
1993
and,
of
course,
the
computers
who
were
using
were
much
less
powerful.
This
was
30
years
of
war
law
in
Reverse,
I.
Think
the
computer
I
had
at
the
time
was
a
PC.
A
B
A
A
First,
there
was
a
Xanadu
was
trying
to
build
the
global
dock
you
burst,
which
was
really
a
world
wide
web
of
hyperlinked
documents.
This
is,
of
course,
the
web.
Before
there
was
a
web,
then
there
was
borac
open
systems.
The
two
of
the
lead
architect
said
at
at
Xanadu
had
been
involved
in
really
thinking
about
distributed,
computational
markets
and
incentive
engineering.
There
were
idea,
futures
markets,
which
we
now
know.
A
So,
let's
start
with
Xanadu
Xanadu
was
trying
to
realize
Ted
Nelson's
vision
of
hypertext.
As
I
said,
the
the
dock
you
burst,
Ted
Nelson
was
the
person
who
coined
the
term
hypertext
the
Xanadu
operating
company
was
formed
actually
to
build
the
technology
to
realize
that
dream.
You
know.
Of
course,
a
lot
of
that
has
been
of
their
dream,
was
eventually
realized
with
the
World
Wide
Web,
but
I
do
think
there
was
aspects
of
what
they
were
trying
to
build
that
were
very
different
from
what
the
web
has
emerged.
A
One
in
particular
was
at
a
very
different
economic
model,
so
they
didn't
think
of
in
terms
of
advertising-supported,
but
in
terms
of
micro
payments
and
royalties
to
the
publishers,
and
they
were
very
much
concerned
with
how
hypertext
could
be
used
to
support
social
discourse
and
how
that
might
lead
to
a
more
open
society,
and
this
is
perhaps
an
area
that
the
current
web
has
not
been
doing
such
a
great
job
at
and
then
there
was
a
gorg
open
systems,
as
I
was
saying.
Mark
Miller
and
Dean
Tribble
were
two
of
the
chief
architects
at
Xanadu.
A
They
had
been
together
previously
at
Xerox
PARC,
where
they
were
working
at
distributed,
secure,
programming
languages
mark,
while
he
was
also
at
Xerox
PARC
collaborated
with
Eric
Drexler
on
something
they
called
the
quark
open
systems.
This
is
a
vision
of
creating
computational
markets
and
they
wrote
as
a
series
of
paper
the
or
system
papers
that
are
outlined.
This
you
it
was.
These
are
the
articles
that
I
had
found
that
led
to
my
trip
out
there,
but
there
was
more.
There
was
Robin
Hanson
doing
idea
of
futures
markets.
A
A
Robin
went
on
after
that
to
get
a
PhD
in
economics
from
Caltech
and
really
develop
these
ideas.
Further
and
Caltech
was
big.
Center
of
experimental
economics
and
experimental,
like
economics,
community
had
been
very
early
involved
in
this.
There
was
group
around
Brian
Smith
at
the
University
Arizona,
who
came
up
with
the
ideas:
smart
computer-assisted
markets
and
developed
things
like
combinatorial
auctions
that
were
you
know
now
possible
on
computers,
probably
most
relevant
for
the
story.
I
want
to
talk
today
is
Amex
of
the
American
information
exchange.
A
I
got
to
meet
Phil
sailin,
who
was
the
entrenar
behind
it,
and
he
feels
very
amazing
person
who
was
really
one
of
the
first
people
to
realize
that
software,
computers
and
communication
could
be
used
to
radically
reduce
transaction
costs,
and
if
you
radically
reduce
transaction
costs-
and
you
can
increase
the
number
of
exchange
and
and
cooperation
among
people
across
spread
out
across
the
globe,
an
axis
has
a
strong
claim
to
being
the
first
smart
contracting
platform.
Now
this
is
very
early
days
now.
Remember
the
picture
I
was
painting.
A
An
Amex
was
designed
for
people
to
exchange
with
each
other,
whether
that's
digital
goods
or
offline
goods
or
actually,
services,
what
they
called
many
consulting
and
behind
that
was
a
smart
contracting
platform.
Was
it
called
that
back
then,
but
it
was
actually
a
system
that
was
built
to
actually
support,
but
not
just
the
execution
of
the
contract,
but
also
negotiation.
They
had
built-in
dispute
resolution,
so
this
is,
very,
you
know,
very
advanced
for
its
time
now.
A
A
A
A
One
was
a
precursor
of
ours
called
AG,
Oryx
and
another
one
was
electric
communities
which
was
where
Randy
farmer
and
chip,
Morningstar
and
Mark
Miller
ended
up,
trying
to
build
out
a
a
much
a
decentralized
version
of
habitat
and,
as
part
of
this
I
came
up
with
these,
what
they
called
the
eight
requirements
for
cyberspace
protocol
and
I.
Think
if
we
look
at
this
or
you
know,
they're
very
much
what
we're
looking
for
today,
you
know
it
needs
to
be
scalable.
A
So,
moving
forward
a
little
bit,
you
really
had
one
I,
think
of
as
the
smart
contract
pioneers.
So
this
is
starting
in
the
mid
90s
leading
up
to
like
the
2000s,
and
you
have
had
nick
szabo
who
coined
the
term
smart
contracts
you
had
in
Greg.
You
came
up
with
notion
of
recording
contracts
and
he
had
Mark
Miller,
who
emphasized,
ear,
I'ts
and
developed
a
programming
language
which
was
designed
specifically
for
building
these
distributed
open
systems
and
smart
contracting
platforms.
I.
B
A
A
They
were
seeing
smart
contracts
as
a
piece
of
the
larger
system
of
how
we
create
these
open
decentralized
worlds,
one
of
Nick's
earliest
papers
on
smart
contracts,
where
he
talks
about
smart
contracts
as
building
blocks
of
digital
markets,
sort
of
lays
out
different
design
criteria
that
we
may
look
for
in
in
smart
contract
systems.
So
there's
observability
to
the
parties
to
the
contract.
Are
they
able
to
observe
what
the
other
parties
are
doing?
Is
it
verifiable?
If
you
need
to
go
to
an
arbitrator
and
they
see
what
happened
or
didn't?
A
A
You
really
need
to
know
the
details
of
the
contract
and
be
involved
in
enforcing
the
performance
of
the
contract
in
privity
is
a
very
important
point
that
to
be
raised,
especially
this
early
in
thinking
about
this,
because
it
really
gets
not
just
to
the
confidentiality
surrounding
contracts,
but
also
the
integrity
of
execution,
and
it
shows
that
there's
much
more
than
just
the
enforcement
of
the
terms
itself.
It's
it's
it's
how
visible
these
are
to
others.
A
That
matter,
then
there's
Ian
Greg,
who
was
developing
a
system
called
Ricardo
I,
think
it's
like
1995
1996,
which
was
really
trying
to
do
financial
instruments,
creating
things
like
bonds,
and
it
was
in
this
context
that
he
developed
the
idea
of
Ricardian
contracts
were
basically
they
were.
You
know
having
50
different
rights,
bundled
in
a
bond
in
the
contract,
and
how
do
you
represent
that
code
and
the
solution
he
came
up
with
is:
is
you
can
triple
graphically
connect
the
written
contract
to
the
through
the
code?
A
So,
as
the
code
executes,
if
there
becomes
an
issue
related
to
what
rights
are
involved,
you
always
have
the
written
contract
to
refer
to.
But
again,
this
is
very
much
just
part
of
a
bigger
system,
and
one
of
the
issues
that
were
really
wrestling
is
back,
then
is
what
is
the
technology
stack?
How
do
we,
you
know
one
of
the
pieces
we
need
in
order
to
build
the
smart
contracts
that
can
play
this
role
in
this
broader,
broader,
open,
decentralized
world.
A
So
he
had
this
notion
of
or
this
paper
he
wrote
called
financial
cryptography
and
seven
layers,
which
sort
of
lays
out.
You
know
one
hierarchy
of
this.
Similarly,
Mark
Miller,
who
you
know
was
background,
was
programming.
Languages
had
worked
at
Warrick's,
building
decentralized,
computational
markets.
He
worked
at
electric
communities,
helping
to
build
the
programming
language
to
support
these
decentralized,
open
virtual
worlds,
and
he
came
out
of
it
very
much
from
a
programming
language
perspective,
but
still
was
focused
on
hat.
What
are
the?
A
What
are
the
layers
that
we
need
to
build
up
in
order
to
get
to
the
place
we
want
to
get
to
with
smart
contracts,
so
his
first
layer
down
here
is
distributed,
object
capabilities
which
provides
secure
programming.
You
know
that
we
can
build
electronic
rights
and,
from
that
get
to
contracts
and
the
networks
of
contracts
etc.
A
Now
the
thing
sort
of
lurking,
in
the
background
all
this
time,
related
to
smart
contract
with
something
called
the
cypherpunk
dilemma
which
is
I,
can
can't
trust
code
that
runs
on
your
computer
and
you
can't
trust
code
that
runs
on
mine
right.
So,
if
I
control,
the
computer
I
essentially
could
control
the
what
the
code
does.
So
how
do
we
have
smart
contracts?
A
A
But,
as
nick
szabo
pointed
out,
third
parties
can
be
security
holes,
so
there's
a
better
solution,
and
this
is
what
really
brings
us
to
today
and
that's.
You
can
run
the
code
on
the
blockchain
and
I.
Think
a
big
part
of
what
the
blockchain
revolution
is
from
the
perspective
of
the
early
smart
contract
things
is.
It
gives
you
a
much
more
credible
computer
that
you
have
a
instead
of
running
your
code
on
somebody
else's
computer
or
running
it
on
a
third
party.
A
A
Something
I
want
to
call
the
smart
contract
stack.
Some
of
the
lessons
I
think
that
these
early,
smart
contract
pioneers
were
groping
towards,
and
this
notion
of
credibility
comes
from
economics.
There's
this
concept
of
credible
commitments,
which
is
okay,
I,
want
to
transact
with
somebody.
This
is
transaction,
is
spread
out
over
time,
and/or
space,
then
how
do
I
know
that
they
will
keep
their
commitments.
You
know,
what
can
they
do?
That's
credible
to
me
that
they
will
hold.
You
know,
keep
their
commitments
that
they
reach
you.
A
This
really
permeates
the
whole
stack.
So,
at
the
lowest
level
we
have
credible
computers.
Again,
the
blockchain
gets
us
further
down
that
road
than
we've
ever
been
before.
I,
don't
think
it
gets
us
anywhere
near
perfection,
but
it
gives
us
a
much
better
credible
computing
base
to
build
upon.
But
then
you
need
credible
code.
A
lot
of
effort,
especially
like
Marc,
with
the
building
secure
programming
language
has
been.
A
You
know
how
do
we
actually
build
the
foundations
and
programming
languages
and
virtual
machines
that
then
we
can
build
up
a
secure
base
for
creating
programs
that
are
credible
when
they
run
again
formal
today
we
also
see
formal
methods
bringing
in
other
tools
to
that
to
get
incredible
code
and
then
there's
associative
protected,
calling
protected
property,
and
this
I
think
harks
back
to
the
virtual
property
that
was
being
created
in
virtual
worlds,
and
that
was
one
of
the
earliest
realization
that
there's
this
notion
in
computers.
It
is
very
much
like
property.
A
In
the
real
world
there
was
there's
a
law
professor
Joshua,
with
Fairfield,
who
thank
you
who
wrote
this
paper
in
2005
called
virtual
property,
and
he
lists
sort
of
three
criteria.
You
need
for
having
property
computer
systems
that
that
act
like
property
in
the
real
world
and
one
is
rival
ristmas,
which
just
basically
means
that
you
know.
If
you
have
it,
I
can't
persistence
right.
A
You
don't
want
your
object
to
disappear
when
you
turn
off
your
computer
and
interconnectedness
that
we
can
often
you
know,
multiple
people
can
interact
with
this,
so
we
need
to
have
some
some
ability
to
exclude
or
or
transfer,
and
all
the
other
things
that
go
along
with
that,
and
it's
really
building
in
this
layer.
That
I
think
is
a
very
important
when
we
think
about
building
a
smart
contract
static,
we
need,
we
need
virtual
property,
we
need
to
reify
rights
within
this
software.
These
need
to
persist
and
another
thing
to
block
change.
B
A
A
So
if
we
can
get
these
other
pieces
in
plays
which
allow
people
to
get
revenue,
you
get
rewarded
for
their
efforts,
another
other
through
other
means,
then
that
gives
us
a
lot
better
chance
to
realize
this
is
a
centralized
web.
So,
yes,
it
could
be
captured
by
others
and
that
sort
of
thing,
but
I
do
think
we
have
a
better
chance,
there's
a
lot
of
people
working
on
it,
so
we
may
actually
get
there
for
certainly
hope.
We
do.
B
A
I
guess
for
us
I
do
think
we
eventually
will
get
to
enter
blockchain
protocols
and
actually
could
raise
up
the
layer
of
levels
of
abstraction
to
get
to
a
point
where
we
can
have.
You
know
not
necessarily
the
need
to
build
separate
protocols
at
every
stage.
You
don't
part
of
that
I
think
it's
a
learning
lesson.
I
do
think
it's
good.
We
have
experimentation
so
as
we
as
we
do
get
new
protocols
to
sort
of
standardize
that
they
need
to.
They
will
you
know
many
flowers
to
glue
so
I
do
think.
A
Well,
the
interesting
thing,
of
course
to
me
is
that
you
know
now.
The
whole
world
is
talking
about
this,
rather
than
just
a
small
group
I
think
at
one
point,
I
felt:
if
we
had
a
car
crash
on
101,
it
would
have
knocked
out
the
majority
of
us.
So
that's
that's
certainly
exciting,
and
the
fact
that
this
is
truly
global
is
just
astonishes
me.
You
know
back
in
the
you
know
the
web
one
revolution,
you
know
the
the
the
the
calm
boom
and
bust.
It
wasn't
global.
A
Yet
right
the
internet
was
new,
it
wasn't
everybody
wasn't
connected.
So
the
fact
that
this
is
happening
everywhere,
you
know
and
that
there's
there
is
this
experimentation.
So
I
think
that
is
not
just
that
there's
capital
flowing
in
here,
but
it's
the
barriers
to
entry,
are
very
low.
You
know
open
source,
open
source
was
a
huge
battle
right.
We
didn't
have
open
source
in
1989.
A
There
was
free
software,
but
it
wasn't
used
in
commercial
things
and
one
of
the
big
problem
with
a
lot
of
these
earlier
early
systems
is,
you
know
they
were
trying
to
build
very
difficult.
You
know
new
things
and
you
know
the
businesses
that
they
were
in
weren't
always
commercially
successful
and
they
would
you
know,
die,
but
unfortunately
the
software
would
die
with
them.
They
would
get
stuck
so
open
sources
of
the
battle
to
free
that
up,
so
you
could
keep
building
on
it.
A
So
I
think
open
source
was
the
first
revolution
and
now
we're
sort
of
getting
into
a
another
revolution
of
open
protocols
and
trying
to
figure
out.
How
can
we
create
a
sustainable
economic
model
around
that
now
there's
a
lot
of
questions
unanswered.
You
know-
and
you
know,
but
I
think
that
there's
a
lot
of
excitement
and
brainpower
and
people
over
the
world
trying
to
figure
this
out
so
I'm
very
optimistic
about
that.