Ian Grigg is an Australian cryptographer and founder of EOS. His work on Ricardian contracts has contributed to the understanding and use of current digital financial instruments. Grigg has worked with the institutional blockchain consortium R3 and the company Block.One, the creator of the cryptocurrency EOS.
This series spotlights cypherpunks whose contributions paved the way for today's cryptographic solutions. So, this time we’ll talk about the work of Ian Grigg and a bit about him. He researched how to combine complex financial and cryptographic concepts into practical solutions and his studies of Ricardian contracts specifically have contributed to the understanding and use of current digital financial instruments.
\However, as a cypherpunk, he keeps his life private. In the past few years, the media coverage about Craig Wright claiming to be behind Satoshi Nakamoto's identity came up with —despite evidence proving the contrary. Beyond all this media noise, we still don’t know much about this cryptographer.
All we know is that Ian Grigg likely comes from Sydney, Australia, and his experience in financial cryptography spans about three decades. Grigg an MBA from the London Business School and a Bachelor of Science in Computer Science from the University of New South Wales in Australia. He also worked as an Independent Auditor for CAcert.org, an initiative that issues certificates to the general public for free. Its objective was to promote consciousness and education on computer security through encryption, specifically with the family of X.509 standards.
Before 1995, the year when his seminal papers on were published, he had amassed a decade of experience as a systems programmer, contributing to various enterprises in a range of unspecified roles. Afterward, he’s been for working with the institutional blockchain consortium R3 and the company Block.One is the creator of the cryptocurrency EOS.
Ricardian Contracts
The studies on Ricardian contracts were the ones that earned him recognition in this series. Ian Grigg named Ricardian contracts after the 19th-century economist , and he aimed to encapsulate the essence of financial agreements in a tradable online instrument. His exploration led him a crucial insight: the legal prose of a contract is deeply intertwined with the core meaning of all financial instruments.
\To issue such instruments, one must condense a human-readable contract in both digital and cryptographic forms. Thus, the Ricardian Contract emerged, offering an architectural framework for digital verification, but also including a document that is readable by humans and carries legal significance. Its effectiveness comes from the strategic use of markup language, which highlights essential data within the text, aiding in the extraction and use of this information by digital systems. Then, the document undergoes cryptographic hashing to create a secure, unique, and cost-efficient identifier.
In distributed ledgers, smart contracts are a similar concept. Another cryptographer, Nick Szabo, previously mentioned in this series, originally proposed this self-executing software. At first glance, smart contracts may seem similar to Ricardian contracts. Indeed, we can say that all Ricardian contracts could qualify as smart contracts, but the opposite isn’t always true.
Ricardian vs. Smart
The key difference between smart and Ricardian contracts is that the former aren’t legal documents, unlike the latter.Smart contracts serve as tools to foster trust and automate tasks on decentralized networks. They’re written in programming languages and don’t require direct human interpretation. On the other hand, Ricardian contracts have the essential purpose of establishing clear contractual terms between the parties involved and can be applied beyond the digital environment.
These contracts represent a sophisticated approach to formalizing digital agreements since they combine legal and technical terms in a single document. Their goal is to address the shortcomings of conventional accounting systems, which often record quantities without clarifying their significance. Ricardian contracts are known for their unlimited semantic richness.
Each unit of digital value in a Ricardian contract, whether a dollar or a token, is linked to a document. This document outlines what that unit represents, including all associated obligations and rights.
Lawyers typically draft this document to ensure it complies with the specific laws and regulations of a determined jurisdiction. Both humans and machines can access it and understand it. Additionally, a digital signature authenticates the contract and is identified through a cryptographic hash. The hash serves as a reference to the contract in digital transactions.
Ricardian contracts enhance the clarity and security of digital transactions, ensuring that everyone involved comprehends the contract terms they are consenting to. Linking each transaction to a particular contract simplifies dispute resolution and bolsters trust in the system.
Ricardian Contracts in Obyte
Ricardian contracts are “live” contracts in that they are designed to be both a legal agreement and a tool that can be integrated into software systems. The term “live” reflects its dynamic nature and semantic richness, making the contract conditions much more versatile.
We can say that common smart contracts in Obyte and Ricardian contracts share some similarities in the sense that they can both be read by humans and by machines. Besides, both contract types allow for defining conditions that govern the release of payments or the execution of other contractual actions. Every party involved has the opportunity to review all the stipulated conditions and make a decision on whether to accept the contract.
However, contracts with arbitration in Obyte, specifically, bear a striking resemblance to Ricardian contracts due to their dual nature blending legal clarity with digital execution. Just as Ricardian contracts integrate human-readable legal prose with cryptographic verification, contracts with arbitration on Obyte combine smart contract features with human-readable terms and the added layer of arbitration for dispute resolution.
This hybrid approach ensures that agreements are enforceable both in the digital realm and in real-world scenarios, enhancing transparency, trust, and security in decentralized transactions.
The process is streamlined, allowing one party to draft and propose a contract while the other can accept it with just two clicks. The parties use the Obyte wallet chat to exchange contract texts and select a professional arbiter from the . Funds are unlocked if conditions are met, but in the case of any dispute, a human arbiter can be asked to resolve it.
This way, Obyte incarnates another interesting feature created and used by cypherpunks, offering a secure and enforceable agreement method within this ecosystem and beyond.
