The Power of Smart Contracts
Hey. Hello, welcome one more day one, more livestream, here on LinkedIn, one more soliloquy. From a very secluded soapbox. Hi. I'm Dennis Lewis, I appreciate. You being here and today we've got a really great topic to talk about it is something that I am passionate about it's something that you as an entrepreneur, must. Know about and yeah. I'm just really, excited to. Be able to share with you today and, talk. To you about smart, contracts, okay, this. Is you. Know literally, one of the. Most powerful, technologies. That. Almost. Nobody even, is talking. About except. In the blockchain community. And even still they're there, they're there they're. Not you, know they're not the main focus people, talk about crypto, they talk about you know the markets, they talk about blockchain, technology. As a you. Know as a distributed, ledger they talk about distributed, applications. They talk about lots of things but, smart contracts, which are one of the most amazing most powerful, you, know innovations. That. Blockchain. Has to offer, often. Get kind of lost. In the shuffle so. Today, we're gonna talk specifically. About smart, contracts, and, we're, gonna talk about you know how they, apply to your business how, how, they can you know I'm gonna give you examples, we're gonna talk about you, know just the, absolute. Power of this technology and it, all starts with a concept, very very important, called trust okay. And I'm just gonna ask you a direct question today, as an entrepreneur, have, you ever. Taken. A loss because someone, rigged, on their words they. Didn't, do what they said they were gonna do they didn't pay what they say it said they were gonna pay they didn't. You. Know they didn't deliver what they said they were going to deliver you, know if you can't raise. Your hand, and honestly say yeah that's happened, to me. Many. Many times then, you're not an entrepreneur because, that's just a reality of being. In business it happens, okay. But, what we're going to talk about today, about smart. Car tracts can, go a very long, way, towards. Resolving, this, very, fundamental. Problem of trust when we're doing business so. That is the the key thing I want you to keep in mind this is mmm. Sure, it's, sophisticated, tech I'll grant you that and we'll talk about the pros in the contract contracts the. Pros and the cons but. The. The. True, power. Of this, is that, it really, goes, right to the core of one, of businesses. Most critical, problems, and that is you. Know we'll keep people, keep. Their word will, they deliver what was promised, will they pay. What was, promised, so, let's let's.
Jump Into this and talk about it and. Let. Me start, off just by talking, about this. Pyramid, of blockchain, technology, so that you guys understand. A. Little, bit better what, we're talking about so the. Very basis. Of blockchain. Is a. Decentralized. A global, decentralized ledger. Okay. It's a fancy, bookkeeping. System it's a way of keeping track of transactions. Okay. I mean literally that's it you know, wallet. A account. A sins, X, amount, to, account. B and. The. Power of that is that, there's no centralized, server so there's nothing to be hacked it. Is immutable, forever, once, a transaction, is committed to the blockchain, nobody's. Getting rid of it it can't be it is amazingly. Secure. Because, of that, and. There. Is a you. Know and it's very fast I mean compared, to, you. Know compared, to other ways of moving, money. It is very fast okay, and it, costs the same amount to send a, dollar, as it does to send a billion dollars okay, I'm. Very. Very powerful. On. Top of that are what we are cryptocurrencies. Okay. And cryptocurrencies were. Basically. Invented. To. Reward. That the, people. Who give. Their computing. Resources, to the network to keep the blockchain up-to-date, okay. Imagine. This the blockchain is maintaining. By millions, of computers. All over the world and they're all connected right they're all connected, over the Internet and they. Work. Together to, keep track, of the transactions. Okay and. You. Know that. Costs money it costs, a car it, costs electricity. It costs power cost, computing, power right so you, know whenever. Blockchain. Was invented, there was the the question was well why would all these computers, do. This what. Did they get out of it and so. They created this thing, called cryptocurrency. Which is a, digital. Money and, that. Is. Kept, track up on the blockchain and the. Computers. That might. It's, called mining, the. Computers, that actually, you know keep. Track of the transactions, they're, rewarded, with cryptocurrencies and in, the beginning that were worthless, nobody. Really, know what they were good for but, it, as a proof of concept it started working and you. Know bitcoin was one of the first ones you. Know and look. Where it is now today it's you know trading, it over seventy-two. Hundred dollars per Bitcoin and it started off at a fractions, of a penny you know okay, so. That's cryptocurrency, that's the next level up the. Third level up and we're going to talk about that today our smart, contracts, and smart. Contracts, are. Enforced. Business, process, it's their, algorithms, that. Do. Business okay so think. About it like this and we're going to talk more about this obviously, but, you. Know think about being. Able to create, a computer. Program, that actually. Does. That actually, handles. Transactions. Does transaction. Doesn't just handle them okay, so think. About it this way you have an accounting system right you. Have an accounting system in your in your business and that's, where you keep track of your of, all your you know your receivable. Your payables your payroll, whatever. That. Keeps, track that's. The blockchain level, okay, but, it doesn't, actually do, anything right, it your. Accounting, system doesn't, do. Payroll, until. You go and tell it to and say pay, payroll, right well. A smart, contract is, much, more, sophisticated than, that it can actually do stuff and then on, top, of smart contracts, or what we call distributed, applications, so, they're fully functional, distributed. Applications, that live on the blockchain so. You could have a fully, functional. ERP. System, built on the blockchain that, would actually. Interact, with with, your business partners for example okay, let's keep going let's get in there and let's let's, talk about some examples and, let's let's, really. You. Know dive into what this means because I just. Listening to me talk isn't gonna be able okay. But remember smart, contracts, are going to change business, this is changing. Business and it is going to change business a lot more so, as an entrepreneur you need to know about that this is a this. Is a wave at big web I'm not gonna sits a tsunami it is a big, wave that is coming fast, and you. Can either surf it and write it too you know and have fun and get, a you. Know, get it you know be a hero or you can crash and wipe out and get drowned by, sharks okay but. The wave is coming so. With. That. You. Know let's. Smart. Contracts, for a whole new. Business mechanism. Okay. Here. Let's let's think about this okay, one. They have a life of their own once they're deployed, on the blockchain smart. Contracts, they. Can theoretically do, their job forever and as, long as that blockchain, exists in it and as long as it's alive, that.
Smart, Contract, will do what it was programmed to do okay. They, can move money so, most, business applications, can only move data a smart, trying track can actually, initiate, real, transactions. Okay. They. Have you. Know on what. We call in changeable, reliability. If, predetermined. Kitchen conditions, are met the outcome is certain you. Know there's no reoccurring, reneging, there's, no tampering. There's. Nothing, can, be you can't you can't fiddle, with them okay once you, deploy. A smart, contract for. Good or bad it will do what you've programmed, it to do so. Remember, they are a business algorithm, that's deployed, onto the blockchain Network and they. Actually. Do. Stuff on the, on on, the, network all by themselves okay, they you don't have to once, you've deployed them, you, don't have to do anything else okay. Let's. Do an example let's, talk about a very, simple joint venture okay, and this is about Bob, and Mary and they decided, to collaborate here they are Bob on the Left Mary on the right there and. Dave, they're, gonna help Anna okay, they're, going to do a service for Anna and Bob. Is gonna get 60% Mary's, gonna get 40%. That's. I'm, sorry I should have done it the other way around but in this case that's that that's what they've agreed on okay, so. Here's, the deal. You. Know. The. Way it works is Anna, pays. The. Smart contract. Automatically. Bob, receives, his share and Mary receives her share there's, no uncertainty there's, no delays there's no disputes, this. Is that this is maybe one of the most simplest, types of of a of, a smart contract okay, and I pace Bob. And Mary get their share okay. It's. Really, really simple but it's also really, really powerful, okay. Think about this how many times you. Know normally, you. Know Anna would pay table and, Bob would have to send Mary her her, share and what. Can happen Bob can be a jerk and not pay okay. Or he. Can say you. Know Mary, you, know I don't think you did really, as much as you said you were gonna do and then there's a dispute and there's. And forth and and you know it. Just becomes a problem with, the smart contract it is immutable. Okay, if a met pays both, Bob, and Mary get paid and that, is a done deal okay. Just. Think about that in your business in your just, just how many times you've been in sort, of that situation. And the, security, that that gives you okay, that's, just the tip, of the iceberg, so let's go a little bit farther let's.
Think About an investment, but let's, create green light investments, okay and. You. Know the. Way we're gonna set this up is that each partner, in the fund is going, to receive, tokens. Okay. So some, digital tokens, corresponding. To the percentage, that of the fund that they'll okay. So. Every. Time a new partner, comes into the fund they're. The. The smart, contract issues, the new tokens and. Green. Light my. Company that we set it up we. Receive. A fixed percent, as a management, fee, okay. This. Is a bit more complicated because, as now there are multiple, partners. In this thing there are people, that come, in, you. Know a. Partner, could, sell. His his tokens. To somebody, else and now they're split, now they're you. Know that. That's okay too, so. Let's think about what happens when quarterly, dividends come through so, all the profits are automatically, deposited into, the fund smart contract okay. Whatever. It is that we're, doing we. We set up so every time every quarter that the funds profits, are deposited, it's the smart contract. Green. Light gets their feet automatically. And then. Each partner, receives, their share of profits, based, on the number of tokens that they have and in, that moment okay. So if they've sent some to somebody else then that's somebody else is going to get their, share okay, and it, all happens, without human intervention okay. There is no. Need. To have somebody, you. Know building, a spreadsheet and calculating, percentages and, keeping, up to date the. Each, partners, percentage, and and then. Doing. Transfers, and wires and you, know all that stuff this eliminates. An enormous. Overhead. Of. Grunt. Work, you know just administrative, work okay. And. You. Know this. Is, it is a simple but very powerful, example. Of, how. You can take a smart contract and just completely. Make. Something. That is a, pain in the in. The ass to, say. It just, honestly. To maintain and boom. It's done it's, deployed, onto the onto the blockchain and it it happens every time exactly, like it has to happen and there's no you. Know no partners, can say hey yeah I didn't get my share my calculation, was wrong my ya, know it's it's it's an algorithm, that does it automatically, money.
Come Prophets, come in everybody. Gets paid he. Instantly. No. No, nothing, more has to happen really, cool stuff right start. Thinking, about. Processes. In your business that are kind of similar that have you. Know have the same kind, of. Complication. In them and think. About how you could use this okay, let's go on let's, think about an escrow, operation, okay, let's sell a house okay. Jane is selling our home to Bob, and Jane. Has a mortgage with big Bank incorporated, and. Bob. Has. The, obligation to. Cancel, the mortgage before he can take ownership of, the, house right, so. How, are we going to make this all simple well we're going to use a smart contract that. Has a, proof. Of ownership token. Is created, on the blockchain it goes to Jane so, Jane mount has a token, that says this, is the deed to this house okay. I have it it's my house I own the token right okay. And Jane. Sends, this token to the smart contract, okay. Now. The. Smart contract is is acting, like an escrow it owns the token it now possesses. The token for the house Bob. Sends all the funds to the smart contract. The. Smart contract cents or the, mortgage amount to big bank automatically. Big. Bank confirms, that it's received, J. He, receives, the remaining funds and Bob, receives the ownership token. Bubbles. All. Without, human, intervention all without having to do anything, else other than deploy, the smart contract at the beginning, Wow. Think, about all the. Steps. That. This normally, takes in the real world okay. And I. Personally know companies. That are working to, do exactly, this okay. So. You know this is this isn't science fiction this is being done as we speak, okay. This. Is you know the kind of revolutionary. Business process, changes. That, smart contracts, are going to bring about so. Let's. Keep going. This. One I loved think about government budgets, let's, think about the the the the. Two trillion that's gonna end up being four or five trillion dollar surplus, you. Know, stimulus.
That, We're doing right now okay, imagine, that the. Budget, for that was put onto the blockchain and. Every. Transaction, was, registered, so, every, time a small business, got alone it was recorded, on the blockchain, every. Time. You. Know somebody. In the White House stuck their thumb in the in the in the pot to pull out a cookie, in the cookie jar it was recorded, on the blockchain, every. Time, you. Know big. Businesses, small business is you know the, every, transaction, that was sent to every citizen for, their you, know the the twelve hundred bucks that they're that they're getting that they're giving up that, was on the blockchain okay. First, of all think of how this, could be so. Much simpler, than what they're doing right now so. Much simpler and then think about the, transparency. Now. Think about how, important, it would be how great, it would be that visible. For all citizens. Everybody. Can look at transactions. And, say hmm. That. Looks like a sketchy. Deal, maybe. That money that went to. Some. Hotel, owner. Shouldn't. Have. Okay. I can, check it I can look maybe, there's you. Know you could, use forensics. And you, could look for kickbacks, and other fraudulent, practices, and, you could look for loops and you know money that goes from here to here from, A to B to C to a you, know all those sorts of things that that kind of you, know forensic, accounting, is much simpler, if every, transaction, is, on the blockchain okay. This. Is something, that, isn't. You. Know the only obstacles. Right now are scale. And. Political. Will when. I talk in, these live streams about a new world and new rules these are the kinds of new rules we need to be thinking about this. Is how this this. Can reduce, fraud, it can reduce corruption it can make things. More. Efficient, it can reduce the need for so. Many you, know bureaucrats. In the middle doing. You know accounting. Stuff because, it, can, all be publicly, visible okay. And we could do this you. Know tomorrow, if we if we really wanted to and now. That we're all sitting at home and we're all thinking, about you know how, fragile society. Is and and how, how. Close, to the edge we've, come okay. And Here, I am under, lockdown right, now so you know I go. When you go to the store you know luckily the, you, know the things are okay there's there's food on the shelves but it. Makes you think how, how. Fragile. It, is and why. Aren't we thinking about new rules for. World. Thinking. About using smart contracts, thinking, about making, sure that, our governments. And our democracy, responds. Back to, us and answers, back to us with being. Good custodians. Okay. So, this is just a big, example. Okay. All. Right. Limitations, let's talk about some of the limitations okay. Smart, contracts. Can. Interact, with the outside world. But. It's. There, are limitations. There it isn't you. Know the this, blockchain, doesn't have eyes it doesn't have ears it, has to interact, with something, that, is. Data oriented so, yes. Could it operate. Off of, information. From the stock market yes it could could it operate. Off information. From you. Know unemployment, or, you, know whatever, you. Know it can interact. With the outside world but, those interactions. Are still, maybe, not as mature as, they should be okay, so, it's. A little bit complicated there they use something called Oracle's. But. You. Know there there, is, that. Can. Be improved these. Are computer, programs still, okay. What, does that mean that means that you. Have to be careful, with them that they're not you can't, they're. Not. Humanly. Readable, right now okay, most smart contracts are written in a programming language they. Need to be written by a programmer, they, need you know there, are some legibility. Issues, that. That. Make this not as. Trivial. As it. Might seem, they. Need to be verified okay, like I said once, they're deployed they're immutable they can't be changed so. You, have to be careful they have to be done right okay, and they have to be debugged and you have to make sure you have to test on the test net you you know it's, not.
Quite. To the point of just you, know sitting. Down with a Word, document in writing a contract okay, you. Know this is a little bit more complicated still, and then. Funds that are inside, are not accessible, you cannot, stick your hand in the cookie jar okay one. Says a. Smart. Contract receives. Money it does what it's been told to do okay. And if you screwed, that up you've got a problem because, there is nobody, in literally, no one can, go in and undo. What you've done unless, there is a. Some, sort of a safety mechanism built. Into your smart contract, okay. So. These are things that there are limitations, that you have to be aware of and you have to know that. Yes. This is revolutionary, yes it's very innovative but hey this. Is on the forefront of where. We are it is a wave okay, you can get wet all right, don't, you know this isn't over but, I really want you to think how could smart contracts, improve your business because. They can and, I, also want you to think you, know now, that we're looking at new times in new you. Know a new world that's going to be coming up. This. Is something you should be thinking about when we talked about business resilience, you know part, of business resilience, is anticipating. The future this. Is the future so. How. Could they improve your, business and also could. They be a threat, to your business if you don't prepare they. Could be so, very, I mean if you are a you. Know if your entitled, insurance for the real estate market, do, you need to be thinking about this because this could be you, know this could in your, your, business model so maybe you need to be thinking maybe you need to be positioning, yourself as the leader for. This, anticipating. That these. Change, is coming to your market okay, very, important stuff okay. Questions. I'm I'm hoping, that you have lots of questions about smart contracts, if you do leave them below and, I will get back to you I'll, answer you in the comments, or we'll do a you. Know on a next. Live stream on one of our future live streams we'll answer your questions, if you, would like, to, talk. About. Smart. Contracts, and your business by. All means get in touch with me send me a direct message leave, me a comment below, or. Just, reach out you've got you've, got the my. Contact, information, here as well if you want to use it so take. Advantage of that if you'd like this a copy of this presentation also reach out I, would, appreciate a like on this video it helps with the LinkedIn algorithms, and. I would really appreciate some, comments. And feedback I hope, you've enjoyed this livestream. And. Yeah. Thanks again and we'll. Talk to you tomorrow take care of stay safe bye, for now.