On March 24, 2015, Steve Omohundro spoke in the Stanford Blockchain Workshop about Smart Contracts and the Internet of Things:
IDC predicts the global Internet of Things market will be $7 trillion by 2020 and will include more than 26 billion devices. It will create value through more detailed sensing, tracking, optimization, and decision making. But there are many issues. Do you want to risk hackers controlling the lock on your front door? Your nanny cam? Your stove? Your stereo at 3AM? You can have the best encryption in the world but if a camera watches you type your password, it’s useless. Passwords can also be extracted from audio recordings of you typing on a keyboard. I have an Amazon Echo which I love, but it has seven microphones which are always listening. Perhaps you want your refrigerator to automatically reorder milk when you need it, but what are the rules governing this? A Swiss artist recently created a bot to randomly order possibly illegal things from the darknet. If your devices reveal information, take harmful actions, or behave in illegal ways, who’s liable? The Swiss authorities ended up arresting the bot and taking its hardware into custody! Information, value, constraints, and rules of interaction will need to flow between large numbers of devices from many manufacturers. Cryptocurrencies and smart contracts are natural technologies for securely implementing these transactions but there are many challenging issues to resolve. We need to extend the human legal code to smart contracts, DAOs, and autonomous entities and to better understand the economic consequences of the machine to machine “second economy”.
Thanks Tim Swanson for the photo: