Smart contracts can redefine business — But this doesn’t imply wide openness

cointelegraph.com:

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance and blockchain space, as well as their roles in shaping the economy of the 21st century.

The contract, an obligation that party A will do something party B desires at a price both agreed to be fair, is in many ways foundational for a functioning human society. As a testament to that, even King Hammurabi, credited as the author of one of the oldest legal codes in the world, saw it fit to codify regulations on the ties and contractual obligations between merchants and their agents.

While in the great ruler’s time, merchants trusted their agreements to clay tablets, today’s counterparts are increasingly trusting their contracts on the blockchain. They look to tap smart contracts, decentralized applications (DApps) stored on-chain as executable code, that can be set off by any network user. Once an innovation brought along by Ethereum, smart contracts now find themselves powering hundreds of decentralized finance (DeFi) services where users trust the code instead of a centralized entity. While centralized entities can perform many of the same functions, DeFi is built around the idea that centralization fosters censorship and inefficiency while decentralized services are more open, transparent and secure.

All of this translates quite nicely into the corporate world. Any business operation often incorporates a specific sequence of actions that the company loops through again and again. Sounds a bit like a computer algorithm, doesn’t it? The same goes for a contract, especially with its terms and conditions easy to imagine as a set of constants with if-else terms and conditions. An