National Association for Business Economics Talk: Cryptocurrencies and Smart Contracts

On Tuesday, April 14, 2015 Steve Omohundro spoke to the Silicon Valley Round Table of the National Association for Business Economics about “Cryptocurrencies, Smart Contracts, and the Future of Economic Interaction”. A pdf file of the slides is here. They presented him with this beautiful plaque:


And we had a fun and insightful discussion. Will cryptocurrencies impact credit card services like Visa? Is bitcoin really money? Is it possible to create cryptocurrencies without huge volatility? Are cryptocurrency derivatives possible? The current world derivatives market has been estimated to be as large as $1.2 quadrillion dollars! Will cryptocurrency derivatives become as large and what effect will that have? Most analyses of the security of cryptocurrencies assume that an attacker is trying to make money. Is it possible to have security against entities, like nation-states, who may have other motivations than making money? Are irreversible smart contracts workable in society (given the possibility of contracts toward antisocial ends)? There are 1.6 quadrillion tons of gold at the center of the earth. Does that impact gold’s value? Will AI-driven high frequency trading impact other markets than just securities?

Cryptocurrencies, Smart Contracts, and the Future of Economic Interaction

by Steve Omohundro, Ph.D.

Contracts are society’s programming language. Corporations are defined by contracts with investors, employees, customers, etc. Countries are defined by social contracts with citizens, representatives, corporations, etc. But today’s contracts are confusing and expensive to create and enforce. They are written in bad programming languages and enforced by slow, complex, expensive, and unpredictable mechanisms.

In 1993, Nick Szabo proposed machine executable “Smart Contracts” which can be self-enforcing. The introduction of the “Bitcoin” cryptocurrency in 2008 provided the decentralized “blockchain” infrastructure for implementing these smart contracts. Bitcoin spawned over 500 alternative “altcoin” cryptocurrencies and they have generated both enormous interest and huge volatility.

New “Bitcoin 2.0″ technologies like Ethereum are just about to be released. These will support powerful smart contracting mechanisms and may transform many areas of human interaction. We describe these new technologies and their connection to the “Internet of Things” and emerging AI systems.

Bio: Steve Omohundro has been a scientist, professor, author, software architect, and entrepreneur doing research that explores the interface between mind and matter. He has degrees in Physics and Mathematics from Stanford and a Ph.D. in Physics from U.C. Berkeley. He was a computer science professor at the University of Illinois at Champaign-Urbana and cofounded the Center for Complex Systems Research. He published the book “Geometric Perturbation Theory in Physics”, designed the programming languages StarLisp and Sather, wrote the 3D graphics system for Mathematica, and built systems which learn to read lips, control robots, and induce grammars. He is president of both Possibility Research and Self-Aware Systems, a think tank working to ensure that intelligent technologies have a positive impact. His work on positive intelligent technologies was featured in James Barrat’s book “Our Final Invention” and has generated international interest. He serves on the advisory boards of the Cryptocurrency Research Group, the Institute for Blockchain Studies, and Pebble Cryptocurrency.

The Silicon Valley Chapter of NABE (National Association for Business Economics was founded in 1984. If you are interested in Business Economics, please join us – pay for your lunch plus $10 meeting fee, participate in discussions, meet an intelligent, interesting people…

More information at

Directions to Palo Alto Golf Course Clubhouse:

Take 101 to the Embarcadero Rd/Oregon Expwy exit

Head east on Embarcadero.

After 0.2 miles, golf course and the restaurant will be on the left.

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