Can Blockchain Solve the Hold-up Problem in Contracts?
Can Blockchain Solve the Hold-up Problem in Contracts?

Author: Richard Holden

Publisher: Cambridge University Press

Published: 2021-11-18

Total Pages: 94

ISBN-13: 100902017X

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A vexing problem in contract law is modification. Two parties sign a contract but before they fully perform, they modify the contract. Should courts enforce the modified agreement? A private remedy is for the parties to write a contract that is robust to hold-up or that makes the facts relevant to modification verifiable. Provisions accomplishing these ends are renegotiation-design and revelation mechanisms. But implementing them requires commitment power. Conventional contract technologies to ensure commitment – liquidated damages – are disfavored by courts and themselves subject to renegotiation. Smart contracts written on blockchain ledgers offer a solution. We explain the basic economics and legal relevance of these technologies, and we argue that they can implement liquidated damages without courts. We address the hurdles courts may impose to use of smart contracts on blockchain and show that sophisticated parties' ex ante commitment to them may lead courts to allow their use as pre-commitment devices.

Can Blockchain Solve the Hold-up Problem in Contracts?
Can Blockchain Solve the Hold-up Problem in Contracts?

Author: Richard T. Holden

Publisher:

Published: 2019

Total Pages: 38

ISBN-13:

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Two parties sign a contract but before they fully perform they modify the contract. Should courts enforce the modified agreement? The modification may enable efficient trade in response to changed circumstances, or one party may have made an efficient relationship-specific investment and then been held-up by the other. Courts have had difficulty tackling this problem because the facts required to discriminate between the two situations are non-verifiable. A private remedy is for the parties to write a contract that is robust to hold-up or that makes the facts relevant to modification verifiable. But implementing such remedies requires commitment to the provisions, i.e., they themselves are subject to non-compliance. Conventional contract technology, e.g., the use of liquidated damages, to ensure commitment are disfavored by courts and subject to renegotiation. Smart contracts written on blockchain ledgers may offer a solution. We explain the basic economics of these technologies. We argue that they can used to implement liquidated damages without court involvement and thereby obtain commitment to renegotiation design and revelation mechanisms. We address the hurdles courts may impose to use of smart contracts and argue that sophisticated parties’ ex ante commitment to them may lead courts to allow their use as pre-commitment devices.

Cross-Industry Use of Blockchain Technology and Opportunities for the Future
Cross-Industry Use of Blockchain Technology and Opportunities for the Future

Author: Williams, Idongesit

Publisher: IGI Global

Published: 2020-05-22

Total Pages: 228

ISBN-13: 1799836347

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Blockchain is a technology that transcends cryptocurrencies. There are other services in different sectors of the economy that can benefit from the trust and security that blockchains offer. For example, financial institutions are using blockchains for international money transfer, and in logistics, it has been used for supply chain management and tracking of goods. As more global companies and governments are experimenting and deploying blockchain solutions, it is necessary to compile knowledge on the best practices, strategies, and failures in order to create a better awareness of how blockchain could either support or add value to other services. Cross-Industry Use of Blockchain Technology and Opportunities for the Future provides emerging research highlighting the possibilities inherent in blockchain for different sectors of the economy and the added value blockchain can provide for the future of these different sectors. Featuring coverage on a broad range of topics such as data privacy, information sharing, and digital identity, this book is ideally designed for IT specialists, consultants, design engineers, cryptographers, service designers, researchers, academics, government officials, and industry professionals.

A Book About Blockchain
A Book About Blockchain

Author: Rajat Rajbhandari

Publisher: Business Expert Press

Published: 2020-12-29

Total Pages: 271

ISBN-13: 1953349390

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This book describes methods to transform existing business by using digitized trust that is industrialized at scale. Executives, consultants, and strategists are wondering how to participate in the blockchain economy. They are wondering whether new business models that will emerge because of this novel technology will disrupt theirs or whether they will ignore their businesses and create completely different models. In this book I answer all those questions. By the time you finish, you will understand what blockchain economy is, how to participate in it, and avoid being disrupted or, even worse, ignored. Drawing from my own experiences as research scientist and entrepreneur, the book describes methods to transform existing business by using digitized trust that is industrialized at scale.

The Cambridge Handbook of Smart Contracts, Blockchain Technology and Digital Platforms
The Cambridge Handbook of Smart Contracts, Blockchain Technology and Digital Platforms

Author: Larry A. DiMatteo

Publisher: Cambridge University Press

Published: 2019-10-31

Total Pages: 500

ISBN-13: 9781108492560

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The product of a unique collaboration between academic scholars, legal practitioners, and technology experts, this Handbook is the first of its kind to analyze the ongoing evolution of smart contracts, based upon blockchain technology, from the perspective of existing legal frameworks - namely, contract law. The book's coverage ranges across many areas of smart contracts and electronic or digital platforms to illuminate the impact of new, and often disruptive, technologies on the law. With a mix of scholarly commentary and practical application, chapter authors provide expert insights on the core issues involving the use of smart contracts, concluding that smart contracts cannot supplant contract law and the courts, but leaving open the question of whether there is a need for specialized regulations to prevent abuse. This book should be read by anyone interested in the disruptive effect of new technologies on the law generally, and contract law in particular.

Smart Contracts
Smart Contracts

Author: Marcelo Corrales Compagnucci

Publisher: Bloomsbury Publishing

Published: 2021-05-06

Total Pages: 256

ISBN-13: 150993703X

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This book brings together a series of contributions by leading scholars and practitioners to examine the main features of smart contracts, as well as the response of key stakeholders in technology, business, government and the law. It explores how this new technology interfaces with the goals and content of contract law, introducing and evaluating several mechanisms to improve the 'observability' and reduce the costs of verifying contractual obligations and performance. It also outlines various 'design patterns' that ensure that end users are protected from themselves, prevent cognitive accidents, and translate expectations and values into more user-oriented agreements. Furthermore, the chapters map the new risks associated with smart contracts, particularly for consumers, and consider how they might be alleviated. The book also discusses the challenge of integrating data protection and privacy concerns into the design of these agreements and the broad range of legal knowledge and skills required. The case for using smart contracts goes beyond 'contracts' narrowly defined, and they are increasingly used to disrupt traditional models of business organisation. The book discusses so-called decentralised autonomous organisations and decentralised finance as illustrations of this trend. This book is designed for those interested in looking to deepen their understanding of this game-changing new legal technology.

The Economics of Blockchain Consensus
The Economics of Blockchain Consensus

Author: Joshua Gans

Publisher: Springer Nature

Published: 2023-06-29

Total Pages: 128

ISBN-13: 3031330838

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Blockchain technologies have been rapidly adopted for the creation of cryptocurrencies and have been explored for a myriad of applications. While this is of important economic interest, the computer science behind how blockchains operate to provide security and provenance has been largely inaccessible to economists. This book is a bridge between the computer science and the economics of blockchains. The focus is on the value and the achievement of blockchain consensus; that is, how distributed and independent nodes are able to reach an agreement on what the current state of digital ledgers, that are the product of blockchains, are. The book shows that the goals of computer scientists in designing blockchains place very high weight on security beyond what an economist trained in game theory and mechanism design would require. It shows how blockchains can be redesigned to account for key economic trade-offs, and will be of interest to researchers and students of economics, financial technology and computer science, alongside policymakers.

Money in the Twenty-First Century
Money in the Twenty-First Century

Author: Prof. Richard Holden

Publisher: Univ of California Press

Published: 2024-01-30

Total Pages: 228

ISBN-13: 0520395271

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An economist examines three modern forces that have redefined what "money" means, who controls it, and what the future of finance might look like. Money is increasingly cheap, digital, and mobile. In Money in the Twenty-First Century, economist Richard Holden examines the virtues and risks of low interest rates, mobile money, and cryptocurrencies, and explains how these three elemental forces will continue to play out—in our wallets, on the blockchain, and throughout major economies—in the decades to come. Holden weaves in the stories of three people who have exerted massive influence over the future of modern money: US treasury secretary Janet Yellen, Ethereum cofounder Vitalik Buterin, and Raghuram Rajan, former governor of the Reserve Bank of India and chief economist at the International Monetary Fund. Moving from micro to macro, Holden investigates the infrastructure that permits digital transactions, the currencies that underpin them, the race for control of those currencies, shifts in policy and the international monetary system, and the impact on our politics of money in the digital age. Ultimately, Money in the Twenty-First Century asks if governments can keep these three tectonic powers of low interest rates, mobile money, and decentralized finance under control.

White Paper Blockchain in Trade Facilitation
White Paper Blockchain in Trade Facilitation

Author: United Nations

Publisher:

Published: 2020-12-28

Total Pages: 158

ISBN-13: 9789211172546

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Blockchain technology is one of the most talked about topics in the sphere of information technology as well as in the facilitation of electronic business. The cryptocurrency Blockchain applications are well known and well-publicized, however, this technology has the potential to influence the way that we do business today, as its use expands to new areas. Blockchain, which is one form of Distributed Ledger Technology (DLT), offers opportunities to increase the reliability and security of trade transactions. The repetition of data among multiple ledgers in a network, as well as the immutability of information after it has been integrated into the Blockchain, can increase levels of confidence for both traders and regulators.

Blockchain and Public Law
Blockchain and Public Law

Author: Pollicino, Oreste

Publisher: Edward Elgar Publishing

Published: 2021-07-31

Total Pages: 256

ISBN-13: 1839100796

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This important and topical book provides a comprehensive overview of the challenges raised by blockchain from the perspective of public law. It considers the ways in which traditional categories of public law such as sovereignty, citizenship and territory are shaped, as well as the impact of blockchain technology on fundamental rights and democratic values.