Episode 18. Exploring Smart Contracts
Much is made of the ad ent of Smart Contract on the Blockchain and how they can revolutionize much of the transactional world. We take a step back and see how this technology could develop/.
- What is a Smart Contract?
- How does it work?
- Does it need a Legal/Regulatory framework to Operate?
- Applicability - Where is it likely to start?
- Why you still may need lawyers and not just coders to implement SC
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How Smart Contracts Work: A Visual Walkthrough
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Good afternoon, everyone. Welcome to another episode of the crypto new podcast. Hello, Alex, how are you doing today? Good. How are you done? Very good. Okay. Today we're going to dive in into a very current topic, I would say now in defy, which is mark contracts. So I have a couple of questions for you. The first one is very generic. How do you think smart contracts with blockchain technology can change the way we do things and can disrupt pretty much the middleman, right? What are your thoughts about this? So I think the best way that I think about it is that contracts can be on a continuum from very complicated, the various. And the idea is so far, there has been only limited automatization, I guess, of contract. If you want to think about it across, you know, physical contracts and you know, more intellectual poverty contracts or securities contracts, they've been, codafide mostly using as a processing engine, the English language, right. And the courts. So that the system, as it exists today is an idea mostly of where the one, we we've lived with is one where you try to put into words either in relatively plain English or in legal ease English. If it's an English language, obviously in in the national language, anywhere else in the agreement. And. As a result of processing engine of it is either plain English or plain legalees English. Right? And the idea being that, depending on what words you use and the pardon, what courts you use, and depending on how much money you have to fight in a legal process to try to get to your outcome of a contract, right? You are. Going to have some certain type of outcome right now, obviously that goes from simple contracts or very complicated contracts. And as you get to the more complicated contract, then more effort is put into looking at all the possibilities of outcomes and looking at every possible way. You can use the English language to describe outcomes. Right. And right there, that's when, once. No. Good. Let me back up a little bit, even before we dive into, can you just briefly describe what a smart contract is? Some, some people might not even know talking about, so we were going to get there, but basically that's more contract is trying to use code or software to describe outcomes based on time or events or whatever it is. So that at the initiation of the contract, You agree to certain outcomes and you essentially ensure that these outcomes come out through software code. So if I'm paying you rent, Then the idea is that rather than me writing you a check and us going through a process, as you would in a re in the physical world of using a number of tools, like a lease agreements, like checks or bank wires or cash or whatever it is in order to do payments, we would describe all of this in software terms, we would store it in a blockchain in this particular case. When we think of the S the. Use of smart contract in crypto, right? Because there are some smart contract that exists in all kinds of different platforms, but the ones that are probably the more interesting ones right now are the ones that are decentralized. And so they'd benefit from all the survivability immutability, the fact that they will always be visible, transparent. Can't be changed by any parties are, and then ultimately, or executed my code, which means that if you've agreed to pay a thousand dollars in rent every year, then that thousand dollars is coming out of your account one way or another. And that brings up a bunch of other issues. But the, the idea of smart contract is simply to try to use software, to describe outcomes and to execute those that. And by definition, going back to the earlier point of the complexity of contracts in the real world, it has way more applicability to simpler contracts and it's proved more problematic in more complicated contracts where the outcomes can be very either complicated or not foreseeable. So what do you think the disruption could. With smart contracts with crypto. Well, I think it's very similar to, we think of money in the crypto itself. It's the concept of a peer to peer agreement. So what happens is that two people right now who want to come to an agreement we'll generally have as a backup, a full legal system in whatever country they live. That may or may not enforce parts or all of the contract, if it is written properly. So there's a number of different ways in which it's a very subjective process. So for example, if you and I were to come into an agreements, there are thousands of types of contracts that we could create in English language. And very, you know, the, the agreement could be one page long. It'd be a thousand pages long. It'd be very detailed. It could be using these words or that words, a number of different ways. Right. This contract, which is a reason to why you hire a lawyer and a law firm to draft and to research and to try to figure out which is the most applicable language. Again, using the English language processing. Again, I'm talking in kind of an thankless excellent context for the moment, but, and then, because there's also other judicial models or legal models Civil code and, and And, and more Anglo-Saxon Druids, prudence, reus, Prudential codes, where, I mean, the main difference was to go through. It does that very often in Europe, in most of the countries that have their antecedents in their legal frameworks for a minute bully in a code, you kind of have to have a certain definition of a market, a certain definition of certain awards of certain. Things, and you need to follow them fairly accurately in order to be protected and have a safe Harbor so that you know, that your intellectual property is preserved or protected or that your contract is enforceable. You need to basically follow some fairly simple or sorry, I should say some very clear rules, if not simple for writing a contract, whereas in Anglo-Saxon UK and us, because it is a living breathing thing, which is based on. Decisions that the courts take based upon cases that are brought up by differences, in opinion, at the contracting level. If you want to think of it that way, then in the U S for example, there's this constant change in how to look at. Perhaps pieces of the law and how things are going to be enforceable because of individual decisions that come up over time. So there could be a major decision that comes in in a, in a particular year that changes the way that you write contracts, because the amperage reputation of the language before that has changed to a new interpretation and therefore the processing or the logic by which you would write a contract can change over time. But. Things that are happening in the system as opposed to laws that are voted on and written by the legislator. So it's a bit of a complication. That's why we need layers. Right? Well, so for example, if you hire a lawyer in Europe, you hire them to understand exactly what the law is to have a lot of experience of writing that a lot of countries. In that particular respect and the people who specialize in having written, you know, knowing exactly why the law was written this way and how it was used and so on, so forth, and the decisions are important, but they're less important. Whereas in Europe, in us, what you'll do is you'll hire a lawyer to analyze a lot of decisions and a lot of existing contracts, of course there's experience as well. But basically they could come up with a different. And analysis in 2022 that they could have come up with in 2018, because this was a com. So again, the lawyers are doing a little bit more of a problem solving exercise. You know, Prudential systems and they're doing a little bit more lookup and application in a civil code system. It's very rough generalization, but basically what it tells you, if you step back is that, so there are multiple ways of using language to try to document agreements and contracts or. Exchanges, right? That again, rely on a fairly subjective medium of which law tries to make a job objective. Right. So how is that a smart contract on a blockchain different from. Sure. So bringing a contract, I guess the way to think about it is that the processing language in, in, in code is whatever the code base is. Right? So there are certain very clear rules that can't really change much that say, if you did this, then this will have him because that's how the. Right. So the promise of smart contract, and maybe it's useful to understand the promise of smart contracts. This, the reality, the promise of smart contract is that if the inputs to your variables, of, to your system, to your contract or your outcome can be well-defined then yeah. You can create the smart contracts fairly easily and, you know, organize the outcome. And execute the outcomes. So if it comes to, you know, paying penalties or paying interest, or certainly as it comes to financial instruments, since the financial instruments themselves lend themselves to coding, then how you pay interest on a loan? How do you share profits? How do you do some of these things can be crucified fairly easily as well. Now the big issue. And I think that's the one that I think you want, wanted to talk about is going to be enforceability. And there is a very large philosophical debates as to whether you need a judicial, you need a real world backstop of judicial remedies that you can gain. You can rectify outcomes that you think are bad. In smart contracts by using the real physical courts and whether there's trust in the system or not. Wow. And that's, I'm assuming if in case of a dispute, right? Because if there's no dispute, there shouldn't be a problem. Or do we still have problems if there's no details messy, right. Because if you're talking about something super simple, then the dispute has got to be relatively simple. Figure out. So for example, take at one. At one end, you borrowed a thousand dollars. The interest rate was 10%. You should have paid a hundred dollars per year, or I guess an interest that one did you pay, did you not pick? I mean, the argument you paid $9 instead of 10 or 11, instead of 10, all these things can be relatively easily understood because the, the parameters of them are fairly straight. Now we can get into the discussion as to whether you failed to pay. That kind of stuff in a second, but let's just for the moment not take credit risk, credit risk. I'm going to put apart meaning that you just break the contract. There's not a dispute. You just walked away UK, the, the, the trade. Those things can be relatively easy to predict and therefore to handle in a smart contract. And therefore a smart contract can be very helpful at the very other extreme is when the two planes hit the world. Center and 20 years ago, there was a whole argument around the insurance company as to whether that made one terrorist event or two terrorist events. Obviously there were two planes, but did the two planes constitutes one terrorist event or two terrorist events. And the reason was that. The insurance that had been, it actually turns out that the world trade center as a real estate project had changed hands not long before the attacks and the insurance had not been fully written. They only had like a temporary insurance and in the temporary insurance, they didn't have all of the right language. And there was a $5 billion difference. So they were, if I remember correctly, either going to get paid back $5 billion or 10, there was a one to two. I may get the numbers wrong, but difference in terms of the insurance payment, depending whether the insurance or the courts, or you tell me decided that there was two events as opposed to one, right? And at the very beginning, when you were writing these contracts very often, what happens is you have a simple contract and then something happens that makes you realize that your contracts. It did not think of something. So in the next time that you write the same contract, you add a clause to deal with something new and then you find something else. And then these contracts tend to grow over time in order to kind of justify all the mistakes that were found over time, which is very similar to code in some ways like you would imagine that smart contracts themselves need to be upgraded. You know, in order to look at a mentality. So that's not, you know, the argument, for example, philosophically as to whether a smart contract stays the same forever or gets renewed. And if it gets renewed, gets, you know, complicated in the same way that the real contracts do, my sense is probably going to be the case, but the smart contract is made. So that code executes the contract. So then the big question, this is why I wanted to put credit risk on the side, which is that the, and the example I gave you earlier, the question is can the smart contract actually do what it's supposed to do without. Any third party. So for example, if you, we can have a smart contract for you to pay me interest on money, I lend you. But if the accounts that you're paying me interest from has no money in it that the contract can executes, but it'll never find money that's not there. Right? So the contract part of it has been handled, you know, maybe even the contract was written correctly, but the problem of course, is that. Logic of how we exists is wrong. It was not fashioned properly because no protection was put in to ensure that the contract could work. Or in other words, could make sure that you had the money and the accounts in, at the time that it needs to be taken. Right. And this is back to, I think the point you were bringing up earlier, which is that lawyers will argue back and forth as to whether. There can be a role for the courts in smart contracts. Right? And so forgetting the fact that any practicing lawyer will want to see a role because they don't want to be engineered out of existence. It remains the fact that the contract itself has to be written in a way that makes sense in order for it to work. Writing a contract that doesn't have, for example, escrow accounts or deposits or pools or ways in which the person we're supposed to pay has put something at risk in order to ensure that the payment will happen against whatever the services that the other side is performing, not having that as like. Major problems, my contracts and instructor. That's the problem with enforceability, right? Well, what, so let's put it this way, right? You have a house, you have a home insurance company, you send them a check. You certainly have a policy. Maybe you even signed it electronically somehow, but basically you believe and trust the reliability of the insurance company. You send them checks every month. And you hope, and you expect that when the time comes for you to use them, they will do with. Right. And there are plenty of examples of it working out perfectly well. And plenty of example, and maybe some examples of not rights, but overall that doesn't change your mind, that you are blindly sending money to someone, right? Whose reputation you believe. And therefore this is all based on trust and. Verification or if you want the court system, which means that you trust Chubb or Transamerica, whomever is your insurance company. But at the same time, you know that there's a problem. You can always Sue them, even though the relatively small size of you versus the insurance company may be a problem. But basically there's a court system out there that is meant to police the behavior of the actors. So what would be the advantage of doing a smart contract, a blockchain, say on home insurance, for example, So the argument is that it would be much simpler and less expensive let's transaction fees and therefore less costly as insurance to base it upon a data and a contract, which is software than it is in the real world. I'm putting that as a hypothesis because I'm not saying it's true. My sense. So that's objective lead the answer to the question, subjectively. My opinion is that it's probably true for certain types of contracts and the absolutely not true for others. Put it this way. Right. Tesla has decided to get into the insurance business, the auto insurance business, and their idea is very simple. They know how you drive. They know exactly how to you drive right now. Are they able to put in. S analysis systems to be able to properly judge what risk you are as a driver in order to quote you you know, a proper quote. I'm not sure, but from a data point of view, they have a lot of information to be able to know what kind of driver you are. And. It would make sense for them to use essentially smart contracts to adjust the pricing of your premium based upon the data coming in over your period and notify you, Hey, this month, your premium went up a little bit because of these four things that we noticed, and your premium went down because of these six things that we noticed or whatever it is, right. And again, a smart contract can do that, whereas a human or a system or an existing legacy system. I can try to do that in some ways, but it won't do it as well. It certainly won't do it as cheaply. Right. So that's definitely an advantage. Yeah. Cost is the advantage. Simplicity is the advantage. I mean, it's an advantage for good actors. Maybe not for bad actors. Well, yeah, that's always a. That's always going to be the problem. Right? It's and for example, the role of an insurance adjuster, the person who processes your claim, when you actually go to the insurance, that's a very interesting, very difficult in my mind process to turn into a machine learning process, there could be ways to look at the data that could be certainly they could look at your reputation. They can look at a bunch of different things. How many claims you've had that kind of stuff. To try to meet it automatic, but usually a human judgment is, is, is has, you know, in 2022, this likelihood that judgment is, is probably still the way to go. Perhaps I don't know, I'm not at the cutting edge of that Sheila bell, but you can imagine that other things, for example, in financial contracts, you know, like, and a lot of it has been. Historically in legacy financial, traditional finance markets, where you see a lot of settlements, you see pools, liquidity pools, you see a lot of instruments being used to try to power this, the core functionality of financial markets like trading, like settlements, like custody, like transfers profit participation. Interest payments and so on. So forth. Many of those are done by, by by software and therefore, or one type of smart contracts, probably the way to think about it as centralized smart contracts, contracts written by a bank of America coder for the purpose of powering bank of America products, which is fine. What are we talking here is smart contracts, which are universal enough to be used on the blockchain, by any participants with any other participants. And so who gets to write it? What's the quality of how it's been written? No, that gets a little messy as to how the market's going to develop, but to get to the next point I shouldn't think is, is, is, is probably the more, the more important points is the. Are the big argument. Now I think in, in smart contracts is do you build smart contracts on top of a legal system, which is that you then find a way to use smart contracts, indirect, plain English language outputs, or site chain or something in which your smart contract is done in a way that perfectly mirrors a a. The established legal process, which are then make it subject to all of the analysis that we talked about before, which would mean that lawyers would have to look at a contract in 20, 22 differently than they did in 2018 and address them in certain particular way. But again, using the lens of the English language being used in the overall system to try to make those determination and try to protect their clients in drafting a contract, right. Smart contracts. Or, and therefore, if you do it that way, then if the system fails at the code level, again, the best example there is like you were supposed to pay me a hundred dollars. You did not. So now let's go to court so I can get my hundred dollars. Right. Or do you build smart contracts in a wage that never need the legal system for retroactive? That cannot fail. It was a very weird thing to think about. Cannot fail, meaning you have already pledged the money or you have a certain amount of liquidity that you've escrowed or there's something that's only if the contract is valid, willing to get the money out, but the smart contract itself can run and the software will not. Because this is the money in the account or the money will come from somewhere else, or it will be a little forced you into some kind of behavior that you will have to work hard to avoid. And so the other philosophy, which I think is too optimistic, but which is definitely the one that a lot of people push is the idea that if you write your smart contracts intelligently and you have a good, you know, smart contracts, lawyer, you know, or platform or. Reseller, those contracts will be written in a way that they can't fault, because again, there's an escrow or something. And therefore that particular point you don't need to worry about whether they are enforceable or not. Because one of the things that you'll hear over and over about smart contract is like, well, yeah, they're not enforced. You know, many of them could be unenforceable, particularly if they are international across jars, this fictional, whatever it is, or there's some kind of fluke in that particular states that you want. So it seems like the goal, the optimistic goal with smart contracts on a blockchain is that they become some, some way trustless where you don't ideally you don't, you're not going to have a dispute. If that's the case, which we're not there yet, we agree with that. But that's where kind of, they're trying to. R with some smart contracts and I'm sure it's going to work better in certain industries or in certain cases better than others, but that was the case. What, in your opinion, and I'm sure we need to, we need some, some degree of imagination here. Right. But to what degree this would change or what's a potential change. If, if this is possible or if we get to that point. So I think one of the biggest changes would be an equalization of experienced rules across national boundaries. So said another way right now, if you want to interact between. Two countries and major blocks. So like the U S and China, the U S and some country in the United, in the European union, or any of these things, you need to spend a lot of time understanding the jurisdiction of one versus the jurisdiction than the other, trying to make sure that whatever contracts you put in and satisfies both, make sure that everybody is, is, is, is held whole for whatever it is, you know, whatever you're trying to protect for. Right. So there's a lot of work that has to go into it. It's very complicated. And you could argue that. We've moved to smart contractor with, again, in a continuum of simple things to contract out versus very complicated things to contract out. As you start taking care more of the simpler end of that spectrum with more and more smart contracts, which will very likely not have any national difference, meaning that somebody in France contracting with another friend. Person contracting with another Belgium person, contracting with a German person, contracting with a Chinese person, contracting with us entity all across the contracts that they'll deal with. Probably look exactly the same is unlikely that they would be four simple things, very, very or at least over time, they were likely to become unified around the set of, of similar code. And if again, you could do that in volume. Then you would find that a large part of international economic contracting differences, or maybe said another way, it would facilitate a lot of no entity to entity dealing that historically has been kind of complicated message. I am not holding my breath for, there are certain actors that's. Th this, there are certain governments who will never just like money, give up their ability to intercede in any national matter. So for example, any contract where a local to your country is going to try to gain a better outcome. You could see the government stepping in. You've seen this many, many times. When it comes to mergers and acquisitions, governments want to protect their IP. They want to protect their national Juul companies. Or there are many ways in which at the extreme, and these are certainly on the more complicated deals side of things, but where you could see that the governments themselves will be more of an obstacle, but for most things, my senses, there's a, there's a good chance. That you will find, you know, things like credit cards, small loans, even equipment loans, a lot of stuff that will then just migrate to a new environment where you register the title of the individual assets on a blockchain, where the financing for the asset will be done on the blockchain, where the contracting in and around the transfer of purchase financing. Collateralization, whatever of the assets it gets done on my smart contracts and all that becomes a bit of a, of a alternate way of, of, of, of managing, of, of managing, managing these assets. Right. That would bring more efficiency that would bring more. Equalization. I think too, you know what currently is a legal regime, like the way we think about it now is that in order to get a certain contract on a certain thing happen, you need to go to whatever the law of that country that states that places in order to do things. All kinds of complications. For example, for banks, banks have to be licensed in 50 states and they have to go in offer certain particular things in old, all these diff you know, different jurisdiction and they have to have capital and all this kind of stuff in all kinds of different places. And you can imagine that financial innovation particularly, or intellectual property, innovation rights, entertainments, creativity, art, many of these things without any of these regulations would be a. Would be easier to deploy and, and back to your point for so many of those regulations are there to protect. And so the question also becomes in smart contract, that what if a smart contract is abusive, meaning that it was enter that time zero in some valid way, but circumstances have changed. And now. It's you know, 10 years later, and that's smart contract that was written 10 years ago. It was about to do something that one or both parties refuse. I mean, I'm guessing they both bar parties want to cancel a contract. That's easy, but if one person has gained an undue advantage on the other and usually, you know, there's some kind of way of re fixing that for the courts, that smart contracts are only in to fix. So, you know yeah. I heard once that idea of like, well, one of the properties of a blockchain gives you is that you can reverse it. Right. But I've, I've heard before the idea of giving the core, the ability to reverse it at some point just to fix the problem that you're kind of describing, but that brings home a whole lot of other problems. Right. If you can actually reverse it, I don't know. I'm telling you. It's a little bit we're in my mind. We're so early generally that I have a hard time thinking three or four steps ahead in what scoring to stay by that I can see it happen. I can understand why, you know, assets should be on the blockchain while all these systems will be much easier to be done there. But in so many ways, just like, you know, I go back to that all the time. Like 25 years ago, when you looked at the web, you would be convinced that pets.com or whatever it is, would have been the winner of something. And we don't know where the shakeout is going to come, come from. So is the thing, you know, from a, from an investment point of view, I think it's extremely difficult to figure out what's gonna work. What's not gonna work. As individual names, right? Like back to the yellow one L two, like, yeah, I do have point. It seems like that's the differentiator between Bitcoin and all the other like Ethereum, Savannah or it seems like a lot of these are a big part of what they're doing is trying to. Oh smart contracts and the blockchain. And that's a big part of the disruption. Well, the thing that was really smart right is, you know, when Vitalik, when some others looked at Bitcoin and said, Bitcoin is too simple, It cannot do processing. I cannot process information on it. I cannot write a program language on it. It literally does one thing and only does one thing that could be an advantage. Right? Well, that was a very important insights because it told you that in order to do more, you needed more than just Bitcoin. That is an important. But at the same time, none of it's and this is again, opinion more than the fact, none of it is feasible without a foundational layer, a settlement layer. And I think that, you know, Bitcoin provides a very simple service, which is incredibly useful in the same way that the us dollar does. Right. I mean, the us dollar itself doesn't do much, you know, kind of like do things with it, but it itself is not meant to be programmable or have much of anything. So the idea of having a theory as you know, and, and the solidity and, and, and, and the languages that are around it in order to, to, to, to, to create projects, to create new rules to grade rules at one level above makes a whole lot of sense, the same way that lightening will create rules for transaction processing and other, you know, DCIS going to be built. On it. So I don't want to go back to our usual conversation as to, you know, where we are and where we're money. The thing about smart contract to think about if you want to summarize is this is very early. They're not applicable applicable in all cases, they need to be con they are, if you want to think about what kind of skills do you need in order to do them? Well, you need more than just programming. So you need human skills. You need what are now called legal skills, structuring skills, you know, outcome mapping skills. You need some hacking skills because you need to kind of envisage how people are going to gain your contract. So if you think that, you know, if Bitcoin is early, then, you know, and if defies early then smart contracts is really early. But it is, you know, a solution for a big part of the landscape. You don't just think of the things that you want to contract in, in out, and be able to smoothly get in and smoothly, get out. A lot of it has already been built, but what people don't realize is behind it as all humans, right? So you go to PayPal and you subscribe to something, or you pay $10 a month to grub hub for something, or w w whatever service you have now, you find it. Easy right now to cancel out of it and cancel and join it. Right. And those things are relatively easy right now. And they are because, you know, the, the consumer usage has gotten more and more refined to a point where we all comfortable taking it in and out. You know, and, and being able to, you know, you don't like something, you go to your PayPal account or stop payment on something. And you were more used to that. Now in the old model where you had the credit card and you had to put a credit card to your wall street journal subscription, and you wanted to cancel your subscription or suspended, or do certain things with it, then you were subject to whatever wall street journal did that New York time doesn't do that. This other publication doesn't do whatever it is. There's no unified system for any of that stuff. Right. Now you can easily imagine that many of the new subscription providers, you know, payment providers, all these kinds of stuff are going to use some fairly standard smart contract systems. There are allow you to opt in, opt out, share data and not share data. Do any of these things across the board for everyone we're not there yet. There's a little bit of PayPal has done a little bit of this. Not it's not, that's not forget. That's all of the stuff behind PayPal is all. You know, payment rails. So you're still paying three, 4% of fees on PayPal transactions as a seller. And this, you know, there's a lot of stuff that's happening behind the scene, which makes it look like a. This is all automated, but really behind it is, you know, software, but running on existing Wells. The, just as an aside for fun, one of my favorite stories as a company, I think Israeli company called CheckFree, that was one of the first companies that went out and did online banking for banks. Right. And so they would sit down with the CTO's I'm going to oversimplify again, but they would sit down with the CTO of large banks and they would say, Hey. You know this 20 years ago, w w we're going to help you get online and get all your customers to have a online 90 count and say, w the banks would say, we're not prepared for this. We don't have the back office. We won't have any of that stuff. We have people who still, you know, do stuff that don't, don't worry. And so forth the way check for you work that the beginning was that they would provide an online website for you to use as a customer. And then they, for example, you want to do automatic bill pay and you found somebody, you know, that you want it to pay your florist or even the telephone company, whatever it is. And you had to send them a check every month, then you would click on the website and sure enough, there was somebody somewhere writing a check, my hand. Right. This is how it starts, right? It's always, the customer experience starts first. We're very used to Venmo the thing, which is very funny, right? Is that a lot of people criticize crypto because they say, Hey, I can already do this payment to payment on Venmo and PayPal and so on. So forth. People don't realize that all that is at a very, very high cost kind of inflexible in certain particular way, but as being built to make it super easy. And the whole idea is. You know, you could have all this without much of the costs of many of the things. If they were done on crypto rails on new, you know let's say finance to zero rails, right? So we, we already understand very well where the market is going and all these things we appreciate when a vendor has a very simple. System freezer manager subscription or their pricing or any of that stuff. We already have moved slowly, slowly to like mostly subscription-based. Many of these things have come completely full circle and we're completely comfortable with them. But actually when you look behind it, they're actually using fairly standard. So existing finance system, it would be very valuable to move all this through to blockchain in order to make it that much simpler, but there are issues and that will take time. Got it. So it seems like four, because it's right now it's pretty user friendly. Like you use Venmo or PayPal or any other kind of like payments. It's pretty user friendly, generally speaking, because we don't know what's going on behind the scenes, but it seems like what you're saying is like the pumping the rails behind that where crypto is heading is to out automate a lot of this stuff. So it's going to be much more efficient than what it is it is today, correct? Yeah. I mean the way to think about it, there's a Venmo, for example. Is was, you know, anybody could use it and through COVID a lot of people use it for business even small business to receive money, to do all this kind of stuff. So it felt super easy. And then sure enough, they blocked you from using. And they started analyzing your payment flow to convince you to, they got a business account where you pay them money, because one way or another, the way that they're structured behind it is still a very traditional finance expensive way of processing payments. Right. So yeah, it was free. They did everything. They could, they had a lot of strategies internally because they remember there was a lot of Venmo to Venmo payments. So then motive, Venmo payments, which they in the. It doesn't cost them very much. As soon as it goes into kind of, you know, it gets withdrawn to real bank accounts and other stuff that has more important. So if you had a hundred, you know, a hundred X of activity on Venmo, you know, one of the ways that they would like to make money right, is to have like 50 or 75% of it stay on the Venmo market because it's just inside the database, moving around. It's not going anywhere. It doesn't currently fees. It's at the minimal level. It's only when it goes into your bank account and out of your bank account, a debit. Of, but still at scale, they decided to needed to have more revenues because that's ease of use is incompatible with, you know, the system that they use behind it which is how they interact with your bank accountants on so forth. Now, if you have Venmo with a crypto wallet or what cash app is doing and square and so on, so forth, then you have a real system where a lot of it is built and then you, as you go to lightening and so on. So for over time, All of the backend, the stuff that you don't see is going to be handled differently with very low fees. But currently there's still all the fees of traditional finance. And, you know, when you use your, you know, it's people like getting models, right? Like, can you work for company X? You use your company X credit card, they pay the bail, you get the miles, you know, the, the industry knows very well that that, that that's. Practice, you know, makes most people happy perhaps, but the truth is that over time, all this goes away, all this mile nonsense goes away and you just have either, you know, compensation for your work. And if you, you know, if you deserve a raise, you'll get a raise, I guess. And at the same time, you know, the fees for sending money around to people who already have the money in their accounts, sending it to other money who have other accounts that should have money in them. Shouldn't call it. Shouldn't cost two, three, 4%. Got it. Well, to anything you wanna add to the whole? I think, I mean, you have to recenter it back to try to understand it and to summarize it. I think smart contracts is something which was very interesting that I think that will take a while for them to become relevant in our lives. I think a lot of people are going to try and do certain things. They'll going to be most likely implemented in easier places and simpler. The, the, you know, the vending machine is the original smart contract, right? That's, you know, it's not something entirely new. And the vending machine very often will fail. Then you call and yell somebody in the real world because they took your dollar. But those are things, you know, the same problems are going to of software and there's gonna be outcomes that are not predictable. So it's more applicable for simpler solutions. I don't think there's any reason to think that smart contract is the reason why car Dano or Ethereum is going to win. Smart contract is complicated to do. It's one thing who knows who's going to win the, you know, probably the simplest solution and the more ubiquitous one will win, but we can't pick it. So from an investment point of view does nothing to, and he's in my mind, nothing that the recommend, but also nothing to hang your, if somebody tells you buy this because of smart contract, Not sure that's a necessarily very strong arguments because he's very early, very, very early. It's difficult to, you know, to tell that this smart contract, because that platform of work. And I wonder, I'm not sure if this is the case or not. Is there any real case use of smart contracts right now that you know of? Yeah. It's, it's implemented in many of the defy platforms to do certain particular things in small cases. Some of them have been Some of them have been exploited at times. Those are the ones that you hear most about, and most of an FTE is built on smart contracts. So the idea of being able to maintain an FTE to a unique, a unique token on any block trade is done through a series of smart, a smart contracts that were written. It's very interesting. I mean, let's put it this way. It's a building block. It's it's like anything in software. It's something that empowers other stuff. And I can make things more efficient than quarterly are, right? Yes. All right. Well, that was very interesting. Thank you for all your insight there. I think unless you want to add anything else, we're good to go now. That's good. All right, well, have a great day, everyone. I hope you have a great week. Thanks for listening.