August 22, 2017
nChain Innovation: On the Road to Smart Contracts
Blockchains are far more than a simple conduit for cryptocurrencies. With their strong cryptographic foundations, they have the ability to become an underpinning technology for smart contracts and these, in turn, offer the possibility for autonomous (or semi-autonomous) organisations.
There is a great deal of excitement around the potential for smart contracts, but they remain in their infancy, and many technical and legal challenges remain to be overcome. Some of these challenges have attracted the attention of nChain’s research team, in order to find solutions.
One smart contract solution is represented by nChain’s patent application is PCT/IB2017/050865, entitled “Registry and Automated Management Method for Blockchain-Enforced Smart Contracts.” This claimed invention expands the cryptographic technique from another of our patent applications (PCT/IB2017/050856) highlighted in one of our previous blog posts. In this patent application, we demonstrate how you can create smart contracts that have two common behaviours of ‘real-world’ contracts – renewing an existing contract or automatically rolling a contract on upon expiry.
Such contracts are ubiquitous in the real world – think of media, cloud storage, and e-commerce subscriptions that have a fixed initial period, and after that period require one month’s notice before termination; otherwise, the subscription is automatically renewed and the consumer’s payment card is automatically charged the renewal fee. Whilst this is easy for the subscription provider to handle with a stand-alone database, this injects a trusted-third party (the database provider) into the model. Using the techniques in nChain’s above patent applications, the contracts and the renewal/cancellation options can be constructed as a sequence of blockchain transactions that eliminate the need for a separate licence database to manage. The result is greater efficiency and automated management of auto-renewing contracts.
The full technical detail of this patent application is available at this link:
Registry and Automated Management Method for Blockchain-Enforced Smart Contracts – PCT/IB2017/050865