What are smart contracts? What are the benefits of smart contracts? What are their weaknesses?

For Journal #2 you will record your thoughts and analysis on the weekly reading material found within the questions provided below based on Unit 4 required course materials (Blockchain and the Law De Filippi, et al and assigned articles and resources). PFA PDF’s Try to the answer fom the attached resources

You will provide a 2-3 section journal entry (minimum of 350-400 words) addressing the questions/topics below. This journal entry should be single spaced and Times New Roman 12-point font. The first line of each paragraph should be indented. APA citing and reference section are not required but sources utilized must be mentioned and any internet link to these sources should be provided in paratheses after first mention of the source.

1) Draft a first section adressing the following as provided within the Blockchain and the Law book and other reading provided:

a) What are smart contracts? What are the benefits of smart contracts? What are their weaknesses?

b) How are smart contracts similar to legal contracts? How are they different?

2) Draft a second section explaining the following as provided within the Blockchain and the Law book and other reading provided (Do not quote any of the source material, you must explain in your own words but properly mention the material utilized):

a) What are smart securities and smart derivatives? How will they enhance and/or disrupt the current financial system?

APA format

In text citations for all the paragraphs

No plagiarism

references

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 51 CONTRACTING IN THE AGE OF SMART CONTRACTS Farshad Ghodoosi* Abstract: Smart contracts lie at the heart of blockchain technology. There are two principal problems, however, with existing smart contracts: first, the enforceability of smart contracts remains ambiguous. Second, smart contracts are limited in scope and capability barring more complex contracts from being executed via blockchain technology. Drawing from the existing literature on contracts and smart contracting, this Article suggests new approaches to address these two problems. First, it proposes a framework based on reliance-based contracting to analyze smart contracts. Second, the Article analyzes the seismic shifts in contractual disputes, and offers new insights into its features including decentralized decision-making, network-based dispute resolution, and extrajudicial enforcement of decisions. The Article concludes that users’ reliance should be the basis for analysis of smart contracts and its associated dispute resolution mechanism. INTRODUCTION ………………………………………………………………………. 52 I. WHAT MAKES SMART CONTRACTS SMART? ……………… 57 A. Explaining Smart Contracts ………………………………………….. 58 B. Validation and Verification ………………………………………….. 61 II. LIMITS OF EXISTING LEGAL THEORIES OF SMART CONTRACTS ………………………………………………………………….. 64 A. No Contract ……………………………………………………………….. 67 B. Unilateral Contracts …………………………………………………….. 69 C. Agreement to Agree ……………………………………………………. 70 * Assistant Professor of Business Law at California State University, Northridge, The David Nazarian College of Business & Economics. JSD, LL.M, Yale Law School; LL.M in Business Law, U.C. Berkeley. I would like to thank Professors William Eskridge, Susan Rose-Ackerman, Ian Ayres, and Daniel Markovits at Yale Law School, Professor David Zaring at the Wharton School of the University of Pennsylvania, Professor Chris Brummer at Georgetown Law, Professor Larry DiMatteo at University of Florida College of Law, Professor Matthew A. Bruckner at Howard University School of Law, Professor Shauhin Talesh at University of California, Irvine School of Law, Professor William Moon at University of Maryland School of Law, Professor Shubha Ghosh at Syracuse Law, Dr. Ali Kadivar, Professor of Sociology at Boston College, Dr. Philipp Hacker at Humboldt-University of Berlin, Professor Alyssa King at Queen’s University Faculty of Law, and Mr. Trevor Kiviat at Davis Polk LLP for reviewing this article and graciously providing their helpful comments. I would also like to express my gratitude to participants of the 2019 American Business Law Journal Invited Scholars Colloquium, in particular, Professor Larry DiMatteo from University of Florida and participants of the 2020 AALS Robotics & AI Panel, in particular, Associate Dean Jeff Ward and Mr. Miguel Bordo from Duke Law School. This project received a research grant from the leading fintech company Ripple’s University Blockchain Research Initiative and the Center for Blockchain and Financial Technology at Morgan State University. In particular, I am grateful for the help and guidance of Dr. Ali Emdad, Dr. Sanjay Bapna from the Department of Information Science and Systems at Morgan State University and Mr. Ken Weber from Ripple. This project was also presented at Ripple’s UBRI 2019 at U.C. Berkeley’s Haas School of Business.

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 52 WASHINGTON LAW REVIEW [Vol. 96:51 III. RELIANCE AS THE BASIS FOR SMART CONTRACTS …… 73 A. Reliance Theory Best Explains Smart Contracts ……………… 73 B. Reliance Theory Can Help to Protect Users’ Reliance……… 75 IV. TWO PROBLEMS OF SMART CONTRACTS……………………. 79 A. Smart Contracts Are Incomplete …………………………………… 79 B. Smart Contracts Do Not Allow Entry Points ………………….. 82 V. TOWARDS TRULY DECENTRALIZED USER-BASED DISPUTE RESOLUTION ………………………………………………….. 84 A. Dispute Resolution Should Be Truly Decentralized…………. 87 B. Network-Based Dispute Resolution Can Solve Some Arbitration Problems for Small Claims ………………………….. 88 C. Smart Dispute Resolution Awards Are Enforceable ………… 90 CONCLUSION ………………………………………………………………………….. 92 INTRODUCTION Contracts are the bedrock of societies and play a vital role in bringing us together. As the founder of sociology, Durkheim, stated roughly a century ago, contracts serve as a central source of organic solidarity. For him, “in a contract not everything is contractual.”1 Similarly, Hanna Arendt emphasized that promise making and promise keeping arise “directly out of the will to live together with others.”2 Contracting lies at the heart of modern societies and human interaction lies at the heart of contracting.3 Digital contracting, on the other hand, promises the opposite: less involvement of human agents and increased automation of obligation performance. What makes a contract “smart” is that it is self-executing and self-enforcing which expunges the need for human intervention.4 New technologies offer the vision that algorithms, codes, and artificial intelligence determine parties’ obligations while parties often remain 1.ÉMILE DURKHEIM, THE DIVISION OF LABOR IN SOCIETY 158 (W.D. Halls trans., The Free Press 1984) (1893). 2.HANNAH ARENDT, THE HUMAN CONDITION 245–46 (2d ed. 1998) (stating that morality, at least politically, does not need support itself other “than the good will to counter the enormous risks of action by readiness to forgive and to be forgiven, to make promises and to keep them”). 3.HENRY SUMNER MAINE, ANCIENT LAW: ITS CONNECTION WITH THE EARLY HISTORY OF SOCIETY AND ITS RELATION TO MODERN IDEAS 165 (Frederick Pollock ed., Henry Holt & Co. 1906) (1861) (“[T]he movement of the progressive societies has hitherto been a movement from Status to Contract.” (emphasis added)). 4.I prefer the term “digital contract” over “smart contract.” Smart contracts can only refer to self-executing codes that run on a particular platform or software (e.g., Ethereum smart contracts) similar to apps in smart phones. Digital contracts, however, refer to a broader phenomenon which is automation of obligations and self-execution of contracts through computers and machine thinking. Since the term smart contract has been widely adopted, I keep this term in this Article.

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 2021] SMART CONTRACTING 53 uninvolved and anonymous.5 The automation has a seismic impact on contracting which traditionally relied on ex ante bargaining and negotiation at arm’s length along with ex post dispute resolution and enforcement.6 This impact requires further (and constant) reexamination and analysis. This Article is a step in this direction. Smart contracts, broadly defined, refer to transactions that machines form, validate, and enforce. For example, imagine Amazon’s Alexa (a virtual assistant) takes your order for pizza on a Sunday before football. Now, Alexa, knowing your past choices for pizza and your preferred time, automatically orders pizza on a Sunday before football. It can go even further by searching all local pizzerias for the best deal and ordering pizza on a Sunday before football. Moreover, if the pizza arrives late (which can be determined via a scanning device at the front door of your house), Alexa only releases half of the value of the pizza based on the pizzeria’s declared policies. Now imagine that all local pizzerias (sellers) and pizza lovers (buyers) are part of a network while each buyer and seller has a virtual assistant that a corporation like Amazon does not control.7 Additionally, no banks clear monetary transactions between sellers and buyers in this network. Here is how it can work: in this network, virtual assistants incorporate a smart contract (a code) whereby it looks for the best price and best terms, concludes the agreement, and transfers the amount. Once the transaction is concluded, other users (which again are virtual assistants that incorporate smart contracts) review the transaction, verify it, and store it on a shared electronic book (so-called ledger). These transactions are immutable, reviewable by all users, and the stored data can inform future transactions.8 Smart contracts have widespread applications in various sectors, particularly in in finance (e.g., Bitcoin, Ripple, Ethereum, Facebook, 5.See generally Lauren Henry Scholz, Algorithmic Contracts, 20 STAN. TECH. L. REV. 128 (2017) (discussing the interpretation of electronic contracts whose algorithms may not be understandable ex ante through the principles of agency common law). 6.See Daniel Markovits & Alan Schwartz, The Expectation Remedy and the Promissory Basis of Contract, 45 SUFFOLK U. L. REV. 799, 808 (2012) (“[A]rm’s length dealing remains the right model for private law, especially commercial law . . . .”). 7.As this example shows and as was previously stated by Richard Gendal Brown, the smart contracts are not just “a computer program.” They are “actor[s] in [their] own right.” They can respond to “the receipt of information, [they] can receive and store value – and [they] can send out information and send out value.” Richard Gendal Brown, A Simple Model for Smart Contracts, RICHARD GENDAL BROWN: THOUGHTS ON THE FUTURE OF FIN. (Feb. 10, 2015) (emphasis in original), https://gendal.me/2015/02/10/a-simple-model-for-smart-contracts/ [https://perma.cc/R93G-7J56]. 8.See id.

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 54 WASHINGTON LAW REVIEW [Vol. 96:51 Libra) and production and supply chain9 (e.g., Walmart test pilot of blockchain following the widespread contamination of romaine lettuce).10 Additionally, there are ongoing efforts to use blockchain in other sectors including insurance (e.g., encoding rules for damages reimbursement), governmental functions (e.g., identity management by automating identity checks), healthcare (e.g., automating processes such as prior authorization for specific treatments), Internet of Things (IoT) (e.g., washing machine automatically ordering a broken part), and sharing economy (e.g., creating member-based autonomous organizations replicating services such as Airbnb and Uber).11 Such digitization of contracts is changing the act of contracting along with the socio-legal dynamics surrounding it. For one, this automated process does not allow for the reciprocal recognition found in traditional contracting.12 Orthodox contract law states that contractual obligations come into existence because they are “immediately chosen”13 and contracts are enforceable because “respect for [counterparties] as free and rational” requires taking their promises seriously.14 In smart contracts, however, interactions that occur through negotiations, an exchange of promises, and mutual assent at the time of contracting are largely absent. Smart contracting also directly affects the very notion of promise. Modern 9.Production refers to the process of creating goods for consumption. Supply chain refers to the process of storing and moving finished goods from the point of production to consumers. 10.Michael Corkery & Nathaniel Popper, From Farm to Blockchain: Walmart Tracks Its Lettuce, N.Y. TIMES (Sept. 24, 2018), https://www.nytimes.com/2018/09/24/business/walmart-blockchain-lettuce.html [https://perma.cc/452M-S2S3]. 11.Valentina Gatteschi, Fabrizio Lamberti & Claudio Demartini, Technology of Smart Contracts, in THE CAMBRIDGE HANDBOOK OF SMART CONTRACTS, BLOCKCHAIN TECHNOLOGY AND DIGITAL PLATFORMS 37, 45–53 (Larry A. DiMatteo et al. eds., 2019). 12.[T]he struggle for recognition is conceptually similar to contract formation in an essential respect. Both involve a confrontation between seemingly independent beings, each seeking to make the greatest possible use of the other while making the smallest possible contribution in return. Yet the process in which they both become engaged—bargaining in the context of contract, the dialectical process in that of the struggle for recognition—leads them to accept voluntarily a very different outcome than that originally hoped for. Michel Rosenfeld, Hegel and the Dialectics of Contract, 10 CARDOZO L. REV. 1199, 1229 (1989). 13.Daniel Markovits, Theories of the Common Law of Contracts, in STANFORD ENCYCLOPEDIA OF PHILOSOPHY (Edward N. Zalta ed., 2015), https://plato.stanford.edu/entries/contracts-theories/ [https://perma.cc/PS8D-AXPZ] (“[A] tort obligation might arise in connection with a choice—as the obligation not to be drunk arises in connection with the choice to operate a car; a contract obligation, by contrast, is itself immediately chosen—at the core of every offer and every acceptance lies . . . an intention to establish an obligation by communicating this intention.” (emphasis in original)). 14.CHARLES FRIED, CONTRACT AS PROMISE: A THEORY OF CONTRACTUAL OBLIGATION 20 (1981); see also Charles Fried, Contract as Promise Thirty Years on, 45 SUFFOLK U. L. REV. 961, 962 (2012) [hereinafter Fried, Thirty Years on] (arguing that contract as promise is based on “morality of autonomy, respect for persons and trust”).

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 2021] SMART CONTRACTING 55 contracts—which Weber calls “purposive contract[s]”15—entail “projection of exchange into the future.”16 In the same vein, orthodox contract theory has emphasized the forward-looking feature of contracts as the basis for contractual liability.17 The promise of smart contracts, on the other hand, rests on the notion that exchanges occur synchronously without future obligations remaining. These essential differences necessitate revisiting the legal nature of smart contracts. The notion of consent-based forward-looking contracts does not squarely fit smart contracting. The current literature has not addressed the nature of smart contracts in light of contractual disputes. Existing legal literature on smart contracting can be classified into three categories: the first category primarily explains the difficult technology underlying smart contracting and providing resemblance to existing legal doctrines.18 The second category focuses on its limits and the hype around the technology.19 The third category 15. RICHARD SWEDBERG, MAX WEBER AND THE IDEA OF ECONOMIC SOCIOLOGY 101 (1998) (quoting MAX WEBER, ECONOMY AND SOCIETY: AN OUTLINE OF INTERPRETIVE SOCIOLOGY 673 (1978)). Weber distinguishes between “the status contract” and “the purposive contract.” Id. The former, which is typical for a primitive society, address a person’s total legal situation and result in a change of one status to another (e.g., one’s wife). Id. The latter “aim[s] solely . . . at some specific (especially economic) performance or result.” Id. 16.Ian R. Macneil, The Many Futures of Contracts, 47 S. CAL. L. REV. 691, 712–13 (1974). 17.Markovits & Schwartz, supra note 6, at 799 (“[G]rounding contract in promise highlights two of contract law’s most distinctive yet least understood features: that the law establishes liability strictly, rather than based on fault; and that it creates forward-looking rather than the usual backward-looking entitlements, entitlements to be made better off rather than to secure the status quo ante.”). 18.See generally Jonathan G. Rohr, Smart Contracts and Traditional Contract Law, or: The Law of the Vending Machine, 67 CLEV. ST. L. REV. 71 (2019) (arguing that the body of law surrounding vending machines can be applied to smart contracts); Scott A. McKinney, Rachel Landy & Rachel Wilka, Smart Contracts, Blockchain, and the Next Frontier of Transactional Law, 13 WASH. J.L. TECH. & ARTS 313 (2018) (discussing the legal nature of smart contracts and suggesting universal smart contracts standards and best practices); Kevin Werbach & Nicolas Cornell, Contracts Ex Machina, 67 DUKE L.J. 313 (2017) (arguing that smart contracts will not displace contract law); Stephen McJohn & Ian McJohn, The Commercial Law of Bitcoin and Blockchain Transactions, 47 UNIF. COM. CODE L.J. 187 (2017) (arguing that smart contracts may be functionally more like letters of credit); Max Raskin, The Law and Legality of Smart Contracts, 1 GEO. L. TECH. REV. 305, 305 (2017) (arguing that smart contract are simply a “new form of preemptive self-help”). 19.See generally James Grimmelmann, All Smart Contracts Are Ambiguous, 2 J.L. & INNOVATION 1 (2019) (showing that all smart contracts are incomplete and ambiguous); Eliza Mik, Smart Contracts: Terminology, Technical Limitations and Real World Complexity, 9 L. INNOVATION & TECH. 269, 299 (2017) (showing that smart contracts are not a “semi-mythical technology liberating the contracting parties from the shackles of traditional legal and financial institutions”); Carla L. Reyes, If Rockefeller Were a Coder, 87 GEO. WASH. L. REV. 373 (2019) (showing the practical and theoretical challenges arising out of blockchain-based business ventures under existing business organization laws); Jeffrey M. Lipshaw, The Persistence of “Dumb” Contracts, 2 STAN. J. BLOCKCHAIN L. & POL’Y 1 (2019) (arguing that traditional contracts will persist to exists since smart

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 56 WASHINGTON LAW REVIEW [Vol. 96:51 analyzes the regulatory challenges arising from smart contracts.20 The challenge in all the categories of the existing literature is three-fold: it often focuses too much on the existing technology; it does not provide a comprehensive view of smart contracting; and it mainly analyzes smart contracts from the formation phase and does not take into account the dispute phase.21 Moreover, the existing literature has largely concentrated on the trust architecture (disintermediation) of the blockchain technology.22 This Article, on the other hand, focuses more on the distributed feature of the blockchain technology, and in particular smart contracts.23 This Article makes two principal contributions. First, it contends that a reliance-based (tort-like) approach better fits and explains the nature of smart contracting. The Article argues the reliance theory best describes smart contract transactions that are concluded largely absent of any human contracts cannot replace human decision-making capability); Usha R. Rodrigues, Law and the Blockchain, 104 IOWA L. REV. 679, 717 (2019) (arguing that smart contracts do not allow for “legal intervention” points); Shaanan Cohney & David A. Hoffman, Transactional Scripts in Contract Stacks, 105 MINN. L. REV. 319 (2020) (arguing that smart contracts—or, as they call it, transactional script—can lower some transactional costs relative to other legally operative instruments). 20.See generally Reggie O’Shields, Smart Contracts: Legal Agreements for the Blockchain, 21 N.C. BANKING INST. 177 (2017) (discussing the legal and regulatory issues associated with the greater adoption of smart contracts); Shaanan Cohney, David Hoffman, Jeremy Sklaroff & David Wishnick, Coin-Operated Capitalism, 119 COLUM. L. REV. 591 (2019) (showing empirically that coin offering codes and initial coin offering disclosures often do not match); Adam J. Kolber, Not-So-Smart Blockchain Contracts and Artificial Responsibility, 21 STAN. TECH. L. REV. 198 (2018) (analyzing third-party harms arising from smart contracts and possible regulations); Carla L. Reyes, Nizan Geslevich Packin & Benjamin P. Edwards, Distributed Governance, 59 WM. & MARY L. REV. ONLINE 1 (2017) (discussing the new governance structure of organizations based on smart contracts and their regulatory risks); Kevin Werbach, Trust, but Verify: Why the Blockchain Needs the Law, 33 BERKELEY TECH. L.J. 487 (2018) (discussing the necessity of regulation of smart contracts). 21.A handful of articles have endeavored to address this deficiency in the literature. See generally Amy J. Schmitz & Colin Rule, Online Dispute Resolution for Smart Contracts, 2019 J. DISP. RESOL. 103 (arguing that parties use online dispute resolution to resolve contract disputes); AMY J. SCHMITZ, AM. ARB. ASS’N, MAKING SMART CONTRACTS “SMARTER” WITH ARBITRATION (2020), https://go.adr.org/rs/294-SFS-516/images/Making%20Smart%20Contracts%20Smarter%20 with%20Arbitration%20by%20Amy%20Schmitz.pdf [https://perma.cc/9D8H-M5XZ] (arguing that contracting parties should build arbitration into their smart contracts). For a general criticism from a psychological perspective, see Jean R. Sternlight, Pouring a Little Psychological Cold Water on Online Dispute Resolution, 2020 J. DISP. RESOL. 1. These articles generally center on the use of existing dispute resolution mechanism for smart contracts. My suggestion is based on the network potentials for dispute resolution. See infra Part IV for further discussion. 22.See KEVIN WERBACH, THE BLOCKCHAIN AND THE NEW ARCHITECTURE OF TRUST 17–32 (2018). 23.Although the blockchain technology achieves trust in part through the distributed feature, the distributed characteristic of the blockchain technology alone, and in particular smart contracts, has not received the requisite attention in the legal scholarship. Simply put, as this Article shows, the easy and wide access to a distributed network of users has a foundational impact on contracting and contractual disputes.

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 2021] SMART CONTRACTING 57 involvement. Second, it shows that, in smart contracts, the human connection can only exist in ex post dispute resolution. This Article argues that ex post dispute resolution should utilize a large pool of users (proof-of-work model) and not a handful of select users (proof-of-stake model). With this structure, this Article argues, several of the existing problems such as repeat players and consumer arbitration could be minimized. There are a few caveats to state at the outset of this Article: first, the technology is still nascent and abstract but reachable. Second, to be absolutely precise, the automation of the formation phase is conducted by artificial intelligence (as it predicts future choices based on past choices), and contractual enforcement is based on the blockchain technology which automates enforcement while disintermediating institutions such as banks via verification by other users. Third, not all smart contracts are spot contracts.24 Some can be relational to a certain extent.25 The focus of this Article, however, is on fully automated machine-to-machine smart contracts that transact on the spot. This Article is structured as follows: Part I provides more background on smart contracts and the most relevant features to this discussion. Part II analyzes the limits of the existing theories on the legal nature of smart contracts. Part III provides a novel approach in analyzing smart contracts and argues for a reliance-based theory of smart contracts. Part IV investigates the problem of incompleteness in smart contracts and the lack of entry points for parties and courts to address the inherent incompleteness. Part IV focuses on contractual disputes in the age of smart contracts and proposes a truly decentralized user-based dispute resolution mechanism. I. WHAT MAKES SMART CONTRACTS SMART? In the first section below, the Article reviews and analyzes the key features of smart contracts. It explains automation, anonymity, and verification process offered by smart contracts. In the second section, the Article zeros in on the verification and validation process while explaining how it has the capability of creating a network-based enforcement mechanism without relying on a centralized authority. 24.Here I use the term spot contracts to refer to one-off agreements that occur on a specific date and are not durational. In finance, spot contracts refer to agreements of buying and selling on the spot date as opposed to future (forward) contracts where payments and delivery are stipulated for a later date. See, e.g., James Chen, Spot Trade, INVESTOPEDIA (Jan. 23, 2021), https://www.investopedia.com/terms/s/spottrade.asp [https://perma.cc/73GV-9YYW]. 25.Stefan Grundmann & Philipp Hacker, Digital Technology as a Challenge to European Contract Law: From the Existing to the Future Architecture, 13 EUR. REV. CONT. L. 255, 267–69 (2017).

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 58 WASHINGTON LAW REVIEW [Vol. 96:51 A. Explaining Smart Contracts What is smart about smart contracts? The answer lies in the possibility of automatic execution using algorithm and codes.26 Smart contracts refer to obligations that are programmable and operate on a distributed network. The notion of smart contracts was first proposed by Nick Szabo who is also widely believed to be the Bitcoin founder, Satoshi Nakamoto, a fact he has repeatedly denied.27 According to Szabo, smart contracts consist of “a set of promises, specified in digital form, including protocols within which the parties perform on these promises.”28 Smart contracts are therefore protocols, or set of rules or procedures for transmitting data. In other words, smart contracts that are embedded in a blockchain can automatically “receive and send assets as well as information.”29 For Szabo, smart contracts “should be embedded in the world,” meaning “to embed contracts in all sorts of property that is valuable and controlled by digital means.”30 To simplify, given the existing technology, smart contracts are similar to apps.31 Just like apps—e.g., Google Maps—smart contracts run on a platform (in this case the blockchain with specific consensus mechanisms) and each has its own rules. In smart contracts, the obligations of the parties are pre-determined by computer programs. More importantly, this new technology enables two vending machines to transact, without direct human involvement, if a condition occurs. For example, if the temperature reaches ninety degrees, vending machine A is programmed to automatically transfer a dollar bill to vending machine B, which in turn delivers a can of cold soda. Another example is fintech companies’ algorithmic trading, by which computer programs determine the selling or buying of stocks.32 For instance, a computer program is set to “sell” an existing stock if its value drops more than 10% while another computer is 26.Raskin, supra note 18, at 306. 27.Nathan Reiff, Who Is Nick Szabo, and Is He Satoshi Nakamoto?, INVESTOPEDIA (Apr. 12, 2018), https://www.investopedia.com/news/who-nick-szabo-and-he-satoshi-nakamoto/ [https://perma.cc/99F7-QUHF]. 28.NICK SZABO, SMART CONTRACTS: BUILDING BLOCKS FOR DIGITAL MARKETS (rev. ed. 2018). 29.Philipp Hacker, Ioannis Lianos, Georgios Dimitropoulos & Stefan Eich, Regulating Blockchain, in REGULATING BLOCKCHAIN: TECHNO-SOCIAL AND LEGAL CHALLENGES 1, 4 (Philipp Hacker et al. eds., 2019). 30.SZABO, supra note 28 (emphasis in original). 31.Jeremy M. Sklaroff, Comment, Smart Contracts and the Cost of Inflexibility, 166 U. PA. L. REV. 263, 276 (2017). 32.Fintech refers to the use of technology and innovation in banking and financial services. See Julia Kagan, Financial Technology–Fintech, INVESTOPEDIA (Aug. 28, 2020), https://www.investo pedia.com/terms/f/fintech.asp [https://perma.cc/JZS2-7Y49].

Ghodoosi (Do Not Delete) 3/22/2021 11:45 AM 2021] SMART CONTRACTING 59 programed to “buy” the same stock if its value drops more than 10%. If such automated transactions are built on a blockchain platform where other users verify the transaction, not an external body such as the Security and Exchange Commission, the contract is a smart contr

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