Noble prize winner Oliver Hart recently stepped into the cryptocurrency and blockchain industry to handle the matter of what is known as ‘contract incompleteness’.
Oliver Hart is a doctorate in economics from Princeton University and was known for his interest in studying how organizations make a contract and how the loop-holes in contracts affected the deals.
— Forbes Crypto (@ForbesCrypto) August 1, 2018
According to Oliver, contracts that companies make for business deals often have loop-holes in them which causes the contract outcomes breakdown. He considered these as ‘fuzzy’ areas and this attracted his interest as to how the parties dealt with these situations. These loop-holes are a virtual breaker of business and are more bound to enter the mainstream with blockchain technology coming more in play. He alongside with a fellow economist was working on the concept coined by them as ‘residual rights’, which states where the ultimate control lies when all potential outcomes breakdown.
The case of an autonomous organization called the DO, using a highly fuzzy contract executed by a smart code caused a transfer of $1.6 Billion worth of Ethereum to a hacker’s wallet. This initiated the birth of a stream of industries of smart contract consulting firms which ensured making of air-tight contracts before they were used.
Oliver Hart joined a similar smart contract company called Prysm Group as their senior consulter and advisor. Here he will have to ensure the contracts are designed so as to deal with all the scenarios which weren’t present earlier and also that the desired end result of the client is achieved.
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