BitHalo, BlackCoin, BlackHalo and NightTrader Revolutionary Smart Contracts Technology Now in Beta: David Zimbeck

Cryptocurrencies' response was to switch innovation to second gear by inching closer towards the implementation of smart contracts. David Zimbeck announced the beta version of the “first known two-party electronic contracting system anywhere in the world” which he calls Bithalo for the protocol to be used with Bitcoin, Blackhalo for the protocol to be used with Blackcoin and NightTrader, a decentralized exchange. In a press release David Zimbeck stated that:

“Almost every sector of the economy that involves third parties runs the risk of loss to the consumer. This protocol now gives individuals full control over who they decide to trust and how they decide to structure that trust.”

Smart Contracts

"Smart Contracts" is a term coined by Nick Szabo in 1993 to describe a conceptual computer protocol which facilitates, verifies and enforces negotiations and the performance of a contract. In the process erasing the need for courts, brokers and other middlemen.

A Closer Step Towards Smart Contracts

A step was taken today in that direction. In a video tutorial preview of the software, the process is shown step by step, from the making of the offer, counter-offer, acceptance, to the transaction being shown on block chain.

In an e-mail exchange, David explained a simple transaction of say 1 bitcoin or 1 BlackCoin for $600. Firstly, the selling party sends the coins to be purchased, plus a deposit, to the escrow. The buying party in return sends only a deposit to the escrow, followed then by the sending of the 600 dollars. Once the dollars are received, both parties will want their deposits back, and the buying party will want the coins. Therefore ensuring that neither has any incentive to default, while the need for an agreement from both parties to release the funds ensures that neither can abscond with the funds.

The Golden Standard

Bithalo, Blackhalo and NightTrader, do not implement the inbuilt script system of bitcoin. A complex framework developed by Satoshi Nakamoto, which allows for the creation of complex smart contracts tied to each transaction.  The Script Wikipedia page might seem forbidding to someone not well versed in computer science as it lacks any real world examples of ways the script programming language could be used. It does however detail a number of operations which in combination can limit the way a bitcoin is to be used at each step of a transaction, or if it can be used at all, unless certain conditions are met. In a new paper, researchers argue that:

"The ability to embed scripts [in Bitcoin transactions] is also revolutionary and can set up terms and obligations within the blockchains, since it provides the possibility to enforce certain behaviours and limit corporate greed."

To know more about David Zimbeck visit: http://davidzimbeck.webs.com/about