Smart Contracts


(Joe Wroe) #1

Out of curiosity, do Monzo have an intention to implement some form of Smart Contract technology? Really interested in how/what this would look like? :thinking:


(Alex Sherwood) #2

Are there any particular ways that you’d like to see Monzo using smart contracts?


(Bradley) #3

Would be pretty cool if Monzo could look into technology like Ethereum. Perhaps as a form of community led P2P or automated loan system? Obviously depends how this affects their own profitability though.


(Alex Sherwood) #4

Do you know of any successful implementations of smart contracts as part of a blockchain, by a large company i.e. large enough for the technology to have been utilized successfully enough to have a commercial, rather than experimental application?

I haven’t heard of any but I don’t pay close attention to this technology.

I’m asking because obviously Monzo are early adopters of new technologies but I wouldn’t expect them to be the first to get this technology working, building a bank is hard enough as it is!


(Bradley) #5

I do not, it’s still in the very early days of development, but the likes of Windows and IBM have recently jumped on board via the Enterprise Ethereum Alliance. Not sure whether it will be a success, but there’s huge potential from decentralisation and automation of payment authorisation.


(Joe Wroe) #6

@alexs I would envisage transactions being agreed through a smart contract that would then activate a payment, at some future point, when the smart contract had evaluated itself? Maybe?


(Joe Wroe) #7

Not currently, but I’d say this has the potential to be the future from a banking perspective:


(Alex Sherwood) #8

It’s a really cool concept! While we wait to see whether Monzo have an answer for this, here’s what Tristan said about Bitcoin -

it’d be great if I was wrong but I have a feeling the answer’s going to be pretty similar…


To add some context to this discussion, here’s the comments from the Co Founder and Director of Blockchain and FinTech at 11FS - the consultancy firm that Jason Bates, one of Monzo’s co-founders, is part of - on smart contracts, in the context of FinTech. As you can see, it’s still early days.

My guess is that as banks talk more about “smart contracts” and DLT instead of “blockchain.” The market will recognize that these corporate things are neither shared databases nor blockchains, but some new interesting thing.

We might have one, maybe two, smaller DAO-like failures in the public blockchain space. As we go through this learning and experimentation, a more useable, more robust framework for token or smart contract-based businesses compatible with local laws will start to emerge.

http://11fs.co.uk/blog/blockchain-trends-place-bets/

& their podcast covering “everything blockchain”, including smart contracts, with Vinay Gupta Strategy & Venture Consultant , Lynsey Barber City A.M. FinTech & Technology Editor and Ajit Tripathi Director, FS: Fintech & Digital at PWC.

The discussion on smart contracts begins at 40:38 -

http://11fs.co.uk/podcasts/ep108-everything-blockchain-ever/


(Joe Wroe) #9

That does make sense and I agree with him.

I can absolutely see the argument against Cryptocurrency as it’s just not that practical or in that much demand by users of Monzo.

There is no reason why the contracts couldn’t be centralised though, which is effectively what Corda is doing. Then, the real world practical uses of a Smart Contract become the significant factor. It then becomes more about providing users with what they never envisaged using over supporting existing technology that’s just not in that much demand by the customers.


(Joe Wroe) #10

Ah! @alexs thanks for the links and info!


(Bradley) #11

Interesting share Alexs, will have to check out the podcast. Will be interesting to see how/whether decentralized currencies and blockchain technologies emerge in their current form and can compete with national currencies. I’ve seen articles of recent that mention private use of blockchain technology, so that could well be the direction things go… But it’ll be interesting to see how far behind the banks will follow and whether the existing technologies and Cryptocurrencies will be able to get enough of a foothold to revolutionise currency.


#12

Not sure if smart contracts are a good idea. I mean, is there really even a need for them?

There’s been quite a lot of situations where people have lost money because the person that drafted the smart contract left something out or missed something. It’s like bugs in source code, but with much more serious consequences.


(Joe Wroe) #13

@awn agreed they’re not fool proof yet, but they will get a lot better. They’re still very young.

I guess the need/value of them comes in removing 3rd parties and arbitration since one party physically cannot change their mind once they’ve signed the contract. I guess that support for this kind of process is completely down to the bank, I’d say a bank that did less of the friendly peer-to-peer transactions and more corporate transactions may value it a lot more. Not Monzo, but there’s no reason that couldn’t be a future vision.