Ian Grigg (@iang_fc) has written an excellent piece on smart contracts, blockchains, Ricardian Contracts, the role of legal, etc. It is long, with a lot of history, and brings the discussion back to basics of an ideal transacting system. In a nutshell: Ian Grigg’s Ricardian contracts and digital assets prehistory – an interview by Anthony Lewis of R3.
Ian mentions the link between Ricardian Contracts and CommonAccord in The Sum of All Chains.
The core is two “triples.”
Data Model Triple
The first triple is the data model. He expresses the order differently, but it is the same as: 1) a record with parameters, 2) some legal prose, and 3) some software code. We express this as two jumps:
- A record has parameters and references its context.
- The context includes i) prior step and other materials, ii) prose and iii) code.
The technical reader will notice that the linkage among records is a semantic triple.
The second triple is Triple Entry bookkeeping – a somewhat confusing phrase IMHO, but simple idea. To have a good system of record (proof), the minimum viable configuration is for there to be three copies of the transaction. Mine, yours, and one kept in trusted hands. Just two copies is not enough because one of us could alter theirs, and make a false claim. How could an arbiter resolve that argument? By looking into the eyes of each party? Eye-gazing can be reduced if there is a third copy in the hands of someone whose reputation is more important to them than their stake in the transaction.
But the additional copy creates a confidentiality and data security problem, and this gets bigger with each additional copy. So the ideal is one copy for me, one for you and one in a trusted place. The confidentiality and security problem can be further reduced by writing just the hash of the record to a trusted place.
Generalizing this further, is is something like the number of parties plus 1. Parties +1 copies. Parties +a hash.
I find the “triple entry” to be confusing because I understand the “double” in “double entry” bookkeeping to refer to the left-side and right-side of a T account. It seems that the triple (and therefore double) of Triple Entry refers to the fact that each party keeps a T account, with mirroring entries vis-à-vis the other party’s T account. https://en.wikipedia.org/wiki/Debits_and_credits#T-accounts