Why Stellar Is the Future of Payment Services

The Stellar network is an open-source protocol that allows for the transfer of credit between different ‘gateways’ located on a public ledger. Gateways on the Stellar network are institutions that hold credits of a specific currency. One example of this is a bank that holds Australian dollars or US dollars. These gateways can then transfer credits between each other, allowing for instantaneous remittances and currency exchange (i.e. An Australian bank exchanging AUD for USD).

What makes the Stellar network distinct is its use of an internal currency, its cheap fees and its extremely fast speed. Unlike networks such as VISA or SWIFT, the Stellar network is able to process transactions, in real time, with little to no fees. It’s both the fastest and cheapest payment network using blockchain technology.

The Stellar network also comes with its own internal cryptocurrency (Lumens). The Lumen currency is useful as it provides liquidity and trust between gateways. For example, instead of an Australian bank having to trust that an American bank will credit it with USD in exchange of AUD, both banks can use Lumens without having to trust each other. The use of Lumens also means that banks and exchanges do not have to hold numerous volatile currencies to ensure that they are always liquid and able to process transactions.

Stellar is looking to become the most popular blockchain payment network ever. Recently Stellar announced a partnership with IBM, becoming IBM’s primary payment gateway. Through this partnership, Stellar will become the new payment gateway for international remittances between banks. It will be used for transfers between the Australian dollar, New Zealand dollar, British pound and numerous other currencies. Stellar is also being adopted by the auditing giant Delloite.

Stellar is not only a platform for large financial institutions but also for consumers and developers. The public nature of the Stellar network will allow developers to build applications (and smart contracts) that interact directly with banks and exchanges. The network and currency will also allow consumers to perform peer to peer currency exchanges on the network itself, avoiding the middlemen of banks and exchanges.

Stellar and its Lumens currency will not be leaving anytime soon. As its adoption continues to grow and banks being to see the potential of Stellar, Stellar may take over as the number one payment gateway and with it, Lumens will become the first transnational currency.

An Introduction to Smart Contracts and the Law

What are smart contracts?

There is no one definitive answer to the question “What is a smart contract?” Depending on who you ask a smart contract could be either considered lines of executable code existing on a blockchain or an autonomous agreement. In the context of the legal industry, a smart contract is defined as an agreement between two or more parties to the exchange of information or assets; based on one or more conditions being met; which is self-enforcing, autonomous and operates as a computer program.

Such smart contracts are not written or oral contracts but are instead programs executed and stored, most commonly, on a trusted and independent blockchain (a decentralized public ledger). Smart contracts do not necessarily have to be executed on the blockchain (such as a simple transaction processed by a vending machine), however, the use of secure blockchain technology ensures that both parties are able to trust that their smart contract cannot be changed or reversed by any party. The use of blockchain technology ensures that both parties are able to view and access the code of a smart contract and also allows for smart contracts much more complex than simple automated transactions.

The purpose of smart contracts is to prevent parties, to a contract, from failing or refusing to fulfill their agreements. Since smart contracts are written into code and executed independent of both parties, it is impossible for any party to renege on their agreement. Essentially smart contracts create trustless environments where parties to a contract do not have to rely on each other nor fallible and centralized institutions (such as law firms or the government) to enforce contracts.

How can smart contracts be used?

There are numerous practical applications of smart contracts. One common application of a smart contract is for betting. Parties to a betting agreement will all send their assets to a smart contract which then waits for a condition to the bet to be fulfilled (for example whether or not a winner has been declared for the Mayweather v. McGregor fight) and then based upon the result, the assets of the losing parties are redistributing to the winning parties. In this example, while the smart contract still relies on a third party to decide the winners, it is impossible for the parties to the contract to renege on their agreements by refusing to pay the winners.

A more complex application of smart contracts is insurance policy. Smart contracts are now being used to autonomously execute insurance payouts, without the policyholder having to make a claim. Instead, payouts can be automated if verifiable and public information (such as if the policyholder had died, or if a natural disaster had affected their home) is found by the contract. Such an application would significantly reduce the possibility of insurance fraud, as well as saving the time of both policyholders and insurers in making and verifying claims.

The possible applications of smart contracts are extensive and varying from simple transfers of assets to complex financial operations. The trustless, self-enforcing and public nature of smart contracts has also opened up the possibility of their use by governments and the legal industry. In many countries and in the US, governments are considering using smart contracts in elections. This fact demonstrates the increased importance of both blockchain technology and smart contracts and, in the context of the law, the need for definitive legislation and research on smart contracts.

Are smart contracts legal?

Smart contracts are not inherently legally binding and recognized contracts, however, that does not mean smart contracts cannot be legal. The legality of a smart contract is dependent upon the nature of the agreement, the conditions of the agreement and whether parties to the contract are consenting. It is also dependent on a legal system’s definition of what is and is not a contract.

The primary issue with the legality of smart contracts is that unlike traditional contracts, smart contracts are neither written text nor oral communication (which is a requirement of contracts in most legal systems). Smart contracts are solely code and while the code of a smart contract is supposed to be accessible to both parties, code is not a natural language or even a language for that matter.

One notable case that demonstrates the risks of recognizing code as a legal contract is the DAO incident. In the DAO case, a smart contract known as the Decentralized Autonomous Organization was supposed to raise money from investors who would then use the smart contract to fund other blockchain projects that they liked. It was essentially a democratic Kickstarter for blockchain projects. The DAO eventually raised over $150 million USD, however, due to a bug in the code of the DAO smart contract, hackers were able to steal over $50 million dollars. Although to the code of the smart contract this was a completely legitimate transaction, the intended and implicit agreement between the participants of the smart contract wouldn’t have allowed for such an action. This case demonstrates the problem with treating code as the rule of law in smart contracts.

One solution offered to this problem is that smart contracts, if intended to have the protection and recognition of the law, should be accompanied by written agreements that would supersede any faults in the code of smart contracts. In such cases, the legality and rules of the smart contract would be clear to both participants and to the law. Outside of cases where smart contracts are not accompanied by written contracts, there exists a large legal gray area. In certain US states such as Arizona, Nevada, and Vermont, legislation has been introduced that legally recognizes smart contracts. However, in other states and countries, there is no definitive legal position on whether code alone is considered legally binding. 

While there are very obvious cases where smart contracts would not be recognized by the law, such as an assassination smart contract or smart contract that trades state secrets for fiat, in more innocuous cases such as betting there are questions over just how much participants are protected by the law. Such questions over the legality of smart contracts will likely depend on future state legislation and an increase in use-cases for which the legal industry can begin to evaluate.

What is the future of smart contracts and the law?

As the use of smart contracts for financial operations increases, so will the desire for definitive legislation on smart contracts. Despite some proponents of smart contracts arguing that they will remove the need for contract lawyers, cases such as the DAO demonstrate that for now, code is not law. Smart contracts do make many common operations and contracts much cheaper and efficient and this may limit the responsibilities of many lawyers, but such contracts will still require the protection of the law.

While the self-enforcement of smart contracts seemingly eradicates the need for contract law enforcement, the DAO shows that when smart contracts fail to enforce their intended agreements, that failure can have significantly detrimental and sometimes irreversible consequences that can only be prevented and reversed by the human element of the law. The legal industry will also play a significant role in assessing the legality of different smart contracts and possibly attempting to supersede the self-enforcement of such contracts when they circumvent laws and regulations (i.e. tax law, gambling laws). Smart contracts are a tool that when used in accordance with the law and with the protection of the law, can provide a great deal of value to its users. However, when such contracts fail to act as intended or attempt to circumvent the law, contract law will definitely be required to overrule smart contracts.

In conclusion, smart contracts will not in the near future be replacing contract law enforcement. There is no doubt that smart contracts will not only require legal oversight to protect consumers but will likely increase the role of law in contracts. The law will be needed to prevent the misuse of smart contracts and the exploitation of smart contract code, for the protection of both consumers and the law.

The Forgotten Histories of the Afghan Cameleers

In 2016 Artist Peter Drew traveled across Australia pasting pictures of Afghan cameleers with the title “AUSSIE.”
In 2016 Artist Peter Drew traveled across Australia painting pictures of Afghan cameleers with the title “AUSSIE.” Credit to Peter Drew.

Until now there has not been a book published in this country that records the contribution of the “Afghan camelmen” to the opening up, growth and development of the Australian colonies. Pamela Rajkowski, author of In The Tracks of The Camelmen

30 years have past since historian Pamela Rajkowski first published her book In the Tracks of the Camelmen and the lack of attention that has been paid to the Afghan cameleers by Australian historians is still a serious concern.

The Afghan cameleers, despite their unfortunate obscurity, played an extremely significant role in the foundations of the Australian state and nation. They left a lasting legacy within the infrastructure and society of Australia. Immigrants from colonial India and Afghanistan that created a wide-spanning network of “camel strings” that allowed for the quick trade of goods across Australia also played an important role in “opening up” the Australian outback. Without the Afghans much of Australia might’ve never been explored and discovered. Their transport network from the 1860s to the 1930s allowed for the building of railroads across Australia and facilitated the building of towns across Australia once called the “Ghantowns.” From Farina and Marree in South Australia to Bourke and Broken Hill in New South Wales, the Afghan cameleers left a legacy of tin shacks, interracial families and mosques. In fact, many cities and towns such as Alice Springs and Marree may have never been developed without the help of the cameleers.

In Marree, the cameleers built the first mosque in Australia, creating a community of Indigenous-Afghan Muslims that would precede later Muslims immigrants from the Middle East. This community of mixed Indigenous-Afghans is perhaps the greatest artifact of the presence of the Afghans. Descendants such as Raymond Satour and Azeem Johnny Khan have allowed the Afghans’ legacy to live on by cooking the foods of their ancestors, regularly meeting with other descendants and attempting to maintain the property of their fathers and grandfathers. In some indigenous communities the words nathuwa and chapatti are still used to mean tobacco and flat bread. The Afghans’ interactions with the Indigenous peoples of Australia helped them share aspects of their culture and in many cases granted the Indigenous peoples with sources of employment with many learning how to take care of and ride camels.

The primary reason why the cameleers are no longer know is due to “White Australia policy” of 1901. This policy led to the forced removal of the cameleers from Australia. Fathers were forced to leave behind the Australian families and the camel string business was replaced with railways which they helped build. Over 70 years of history was eventually forgotten and the important place that the Afghans once held in the Australian nation was replaced.

The impact of the Afghans on Australia should not be understated. Their work played a crucial role in the foundation of Australia. Despite this much of the work of the Afghans has been ignored by mainstream Australian society. The average Australian can you tell more about the life of iconic Australian criminal Mark Read than they can tell about the lives of the Afghan cameleers that founded Australia.

These histories are not just important because they teach us about the foundation of Australia but because they challenge the stereotypical image of what an Australian should look like. The cameleers teach us that the Australian nation is much more than what faux-nationalists such as Pauline Hanson and Alan Jones would like us to believe, the Australian nation is and has always been multicultural.

These histories must not be forgotten but instead hailed as proof of the successful, rich and expansive history of multiculturalism in Australia.