By Dermot Harriss
LabCFTC has released a new cryptocurrency primer, this time a primer on smart contracts. For obvious reasons it isn't meant for aficionados, but probably aimed at the savvy investor who is perhaps a little less savvy that he or she thinks. I wouldn't call it deep, but it is better written than their primer on bitcoins. It has a nice list of risks at the end. One risk is missing, one that might be more important long term than risks they do mention: software obsolescence, also known a 'bit rot'.
Here's the thing: archeologists have recovered contracts written on papyrus that are thousands of years old, still readable, and potentially fulfillable if any of the counterparties was alive. It works because the technology is simple. Meanwhile, modern librarians tear their hair at the loss and cost of fast-deteriorating digital documents. How long can people expect code-based smart contracts to last? Only as long as revenues support a robust technology refresh cycle for them, that's how long. How much value will one service provider bankruptcy destroy? Time will tell. #bitcoin #cryptocurrency #markets #smartcontracts #onemarketdata
See OneMarketData for proven and cost-effective solutions.
Dermot Harriss is responsible for delivering solutions that help firms meet their regulatory compliance needs. Dermot brings over twenty years of financial industry experience from roles at Goldman Sachs, Morgan Stanley, and D.E. Shaw that included futures trading, quantitative strategy development, derivatives risk management, program trading, execution services, and technology management.
If you are not subscribed to our blog, please SUBSCRIBE HERE