Ricardian Contracts

Ricardian Contracts are really a stepping stone to Smart Contracts.  They are a way to link a contract to another system, typically an accounting system.  Ian Grigg came up with the Ricardian Contracts some time ago.  He first published about it in Financial Cryptography in 7 Layers in 1998.  Ricardian Contracts were initially used for Ricardo (hence their name), a bond platform.

They are a melding of a traditional contract with a contract that can be read and executed by machines. A Ricardian Contract can be defined as a single document that:

  1. is a contract offered by an issuer of some item of value (think of a bond, coin, token, currency, etc.) to a holder of such item;
  2. for a valuable right held by the holder, to be managed by the issuer;
  3. can be read in plain language by humans (so like a normal contract);
  4. can be read by programs (and is parsable like a database);
  5. digitally signed;
  6. carries the keys and server information; and
  7. is allied with a unique and secure identifier.

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Digital Signatures – Basics of Hashes and Encryption

When dealing with online contracting, blockchain, clickwrap agreements, smart contracts, or just generally these days (and certainly in the future), you will come across the terms “hash” and “encryption.” Especially when discussing digital signatures. We’ll try to distill these a bit for you.  These are all regularly used in the transmittal of electronic information and verification of the information, the sender and/or receiver. Read more