Eliza Mik teaches Contract Law and Legal Technologies at the Chinese University of Hong Kong. Before joining academia, she has worked in multiple software companies, tech start-ups and telecommunication providers in Australia, Malaysia, Poland and the United Arab Emirates advising on e-commerce, payment systems, software licensing and technology procurement. Throughout her academic career, Eliza maintained a consistent focus has been on the legal implications of transaction automation, including blockchains and Artificial Intelligence, as well as broader issues surrounding the Digital Economy and the proliferation of ubiquitous computing in retail environments. Adopting a practical, commerce-oriented approach, Eliza has published in prominent journals the areas of contract, e-commerce and cyberlaw. Her current research centers on the legal issues relating to the implementation of smart contracts and on the use of machine learning in law.
The Paradox of Programmable Money: Decentralized Smart Contracts meet Centralized Digital Currencies
Abstract:
At their core, smart contracts embody the ideology of decentralization and disintermediation. They are supposed to replace banks – not to render banks more powerful or efficient; they are supposed to revolutionize payment systems, not just to optimize them. The resulting dissonance becomes immediately apparent: how can we combine a central bank digital currency with code that is not only supposed to execute in a distributed and decentralized environment but also to render banks obsolete? How can smart contracts fit into an ecosystem that, by definition, strengthens centralization and redefines financial intermediation? This presentation takes a closer look at the promises and premises of smart contracts, both technical and ideological. Abstracting from the popular hype surrounding this concept, it draws a clear distinction between smart contracts on paper (the manner they are described) and smart contracts in practice (the manner they function). It also contrasts popular beliefs as to what smart contracts can do with their actual, technical attributes and capabilities. Particular attention is devoted to the risks and benefits of transparency (the visibility of their code) and immutability (the inability to change the code). If money is to be programmable, then it is important that the relevant programs are not only fast but also secure and predictable. If money is to be programmable then it is important to put aside ideological indulgences and focus on ensuring that the technology can meet the challenges of the modern marketplace.