We live in a world full of intermediaries, and their function is to act as a trusted connection between two parties in transactions, services, or agreements. Although they are currently an essential part of how we all interact, many projects in the Ethereum ecosystem are beginning to explore a world without these centralized organizations because too much value has been forfeited in exchange for the trust and manner of service they provide. The Equifax breach a few months ago, where hackers accessed the extremely sensitive information of 143 million people, is a clear example of the damaging consequences that arise when trust is violated. Decentralized business models, built on smart contracts are a potential solution to this issue of trust. A few weeks ago, we attended the NYC Ethereum Meetup where Raine Revere spoke about ShapeShift’s Prism and highlighted key benefits that smart contracts provide.

Smart Contracts

Smart contracts are sets of programmed rules and parameters that enable users to interact directly with each other, and log the history of user interactions on the blockchain; it enables us to get more value and security in exchange for our trust. This particular class of code adds an unprecedented layer of transparency between parties because the conditions are visible for all to see and will be upheld exactly as written. ShapeShift has utilized this tool to build Prism, a platform where individuals create digital asset portfolios without an intermediary.

Users can design a “Prism”, a portfolio containing their favorite cryptocurrencies without the need to find trustworthy wallets, sync up to multiple blockchains, or deal with exchanges. These Prisms will be fully-collateralized by the user and another party who takes the opposite position. By engaging directly with one another, fees can be greatly reduced and valuable time can be saved to achieve more efficient wealth management. Prism also demonstrates a smart contract’s ability to track data; in this case, the value of the assets.

Unfortunately, there are also downsides to working with smart contracts. Although the conditions are visible for all to see, the code that contains them is more than likely incomprehensible by the average person. Revere explains that a thoughtful design methodology and intuitive user interface is imperative to reduce the amount of trust involved and help distinguish the terms of agreement. The Prism demo makes it quite clear the ShapeShift team kept these precautions in mind as they developed the project. As mentioned above, smart contracts will deploy exactly as written. This is a double-edged sword. If a smart contract is written poorly or contains an error, it can become exploited by hackers or funds can become lost.

Conclusion

Ethereum is opening doors to new business and social models via decentralized, disintermediated programmable smart contracts. This powerful tool could reshape how the world sees intermediaries due to its ability to make transactions more efficient and transparent. Despite the challenges of writing flawless smart contracts and designing a complementary user interface, the Ethereum community is making steady progress towards perfection; however, this is a new frontier and no one knows exactly what perfection looks like. dApp builders must work within the scope of what is currently possible while maintaining an ideal vision of the future to keep expanding the realm of possibilities.

At imbrex, we envision a future where real estate data is easily accessible and free, users get paid for contributing data, and transactions happen in days…not months. To make this a reality we’re writing smart contracts that can effectively and securely deploy in today’s ecosystem, becoming fluent in design methodology, analyzing various token economy models, and creating a welcoming user experience to tie it all together. We’ve made tremendous progress over the past year and are excited to release our Alpha on mainnet early next year. As pioneers of this uncharted territory, we remain curious of what is possible and proceed with careful experimentation to build a platform that will change the real estate industry forever.