For the ten thousand years of history before the internet, if an entrepreneur built a brick and mortar business—a general store, a blacksmith’s workshop, a widget manufacturering factory—they could touch and feel and deeply understand what they owned, and what was dependent on others. The encroachments that did exist were intuitively understood: the king could come take whatever he wanted, the tax collector needed his due, the invading band of outsiders were going to try to pillage, etc. And even for the things that were managed through a network of relationships and contracts, say, a promise to deliver a shipment of materials sometime in the future, had a level of human interaction and consideration that could be understood how they were presented on their face. This was because interactions between entities were largely transparent to the participants, carried persistent reputational influence, and weren't intermediated by a black box of technologies and interwoven dependencies. 
​
Moving into the digital age, the nature of business interactions have changed drastically, and yet entrepreneurs tend not to have updated their intuitions to keep pace with the actual mechanisms of ownership. In some sense, there are very few business 'owners' remaining in the world, and rather there are people who steward businesses that they believe they own but over which they actually have very little control. This mechanism started out slowly: huge companies depending on computers that they would lease from manufacturers and which would come with recurring maintenance contracts. This dependency offered a trade off that seemed so obviously worth it that only a fool would pass on the increased productivity. This perhaps transitioned into running a complicated server in some closet of an office space, with a dedicated IT guy that does a bunch of things opaque to the rest of the organization. And now... now there is almost inevitably in every business a giant rat's nest of SaaS subscriptions, End User License Agreements, compliance policies, and self-referential contracts which include some clause along the lines of 'subject to change arbitrarily and without notice'. In short, if you are running a business in the 21st century, it is probably the case that YOUR BUSINESS ISN'T YOURS.
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Let's be clear, any sufficiently advanced organization is never going to get away from depending on people and interactions outside of itself in order to deliver the best solutions to customers, and specialization is an amazing feat of human society, but the point here is about how YOUR INTUITION IS WRONG that your business is yours. 
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Everything you think you own is probably attached to an EULA or Terms of Service that contains clauses that nobody but the lawyers who wrote them have ever read. Your social presence, your email server, probably even your website are tangled up in this mess. And if you have built the core of your business on top of Amazon, or Walmart, or some other MEGACORP's API and you get big enough for them to pay attention to you because you are providing a great service to customers, are you going to get a sweet payout? No, you aren't in a great place to get acquired; you are dead and you should kneel before your overloads and ask for the scraps of the enterprise they are about to cannibalize. Maybe they'll be nice and give you a senior director role managing the shell of your former life's work. Why does this dynamic occur? Because they can turn off your endpoints with a flick of a switch, pull it in house, and you can do nothing to stop them. Because unlike you, they do own your business (even though you haven’t sold it to them yet).
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Of course, the fact that you—and so many others—have outsourced or lost operational control over so much of your business comes with a lovely list of downsides; to name a just a few:
- Centralization creates incentive risks (see all the weird shit that MMANG are doing to implement large scale social manipulation, not to mention Vanguard and Blackrock's plays into ESG and 'stakeholder capitalism')
- Your ability to say 'no' to changes to your business that conflict with your will is reduced
- It makes the human connection between service providers and customers one fraught with middlemen who spy on you and sell your data
- It generates a feedback mechanism that is incapable of checking itself, slowly wandering it's way toward paperclip optimization instead of orienting towards human action or flourishing.
- etc etc etc. Try coming up with some on your own, it's not all that hard.
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And maybe these are catastrophizing the situation. That might be a fair point, but how about a smaller example of life's minor annoyances:




What is this, you might say? This is the [documentation for the `IsProject` parameter from Quickbooks online for the Customer object](https://developer.intuit.com/app/developer/qbo/docs/api/accounting/most-commonly-used/customer#customer) and for some obtuse reason it is read only. What does this mean in practice? It means that you cannot use an outside service or application, i.e. your CRM, to create a new customer and job within your accounting software and therefore have to manually take this action if you want to track your client arrangements as `Project`s within quickbooks. Are there workarounds? Sure, but they come with trade offs on the UI side of things because you are a captive audience. And if Intuit decides one day that they want to change all this and give you a massive operational headache, that's their business (and what you thought was your business). But this is just one of many experiences that continually stack up and cause endless pain and discomfort.
​
The correct reaction to this, though, is not becoming a Luddite, or being defeatist about how MEGACORP is eating the world and will probably ultimately turn you, your children, and your Tesla into a paperclip. Fighting technological advancement is a fools errand, whether it comes in the form of legislating restrictive ownership of firearms (as a fundamentally 100 year old technology) in a world of hyperinformation networks and distributed manufacturing, or a more classic attempt to 'RETVRN' to the land and pull some sort of Amish 'live the rest of your life without a lightbulb' move. Why? Because life is an arms race and retreating from change not only means giving up your own future, but it means that you are ok sacrificing the rest of humanity to some creepy Mark 'VR-headset-metaverse' Zuckerberg, Bill 'eat-the-bugs' Gates, Jeff 'live-in-the-pod' Bezos future. Don’t do that.
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Instead, you need to rework your understanding of ownership for the 21st century. If ownership of your money is by way of running your own bitcoin node and holding your own private keys, then ownership of your business needs to be around controlling and understanding the data, computation, and digital interactions that form the core of your value proposition to the world. In many ways, this will be unique to your skillsets, life experiences, and target market. But in many other ways it is fairly standard, particularly for any sort of client services business. There are six core elements (after a baseline of Identity & Access Control, and Communications Channels) that are fundamental to any digital services business, each with their own areas of essential operations that should be understood, owned, and interactive in order best execute your will as a business owner:
- Accounting & Finance; covering bookkeeping, financial reporting, contracts, banking, and payments.
- Security & Compliance; enabling secure file sharing, internal policy documentation, and automation of compliance obligations.
- Delivery Operations; providing external client communications, project management, progress reporting, task tracking, and time tracking.
- Talent Management; unifying external reputation tracking with internal profile management, team onboarding, best practices, wikis, vendor agreements.
- Sales Operations; actionable customer relationship management, integrated case studies, proposal development tooling and reference materials.
- Marketing & Discovery; presenting outward organizational brand, content marketing, and other marking messages through web publishing and supporting word of mouth discovery. 
​

Currently, most businesses have been sold on offloading these responsibilities to QuickBooks / Microsoft 365 / Google Cloud / Hubspot / Asana / Workday / Zoho / Dropbox... the list goes on... in favor of 'focusing' on their unique Product Creation and Service Execution. But this is increasingly risky in a highly iterative world, and builds your operation into a expensive, complex, obfuscated mess of admin panels and other people's servers, any of who's changes could cause your house of cards to come crashing down. Instead, the above six areas should be a stable foundation that you truly own, upon which your organization can depend while it iterates from product to product and client service to client service.
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Of course, here is where we shill Urbit as the place where building these things into the stable foundation for running human scale businesses is actually possible. But more on that later, as long as I've opened your eyes to the fact that your business isn't yours, I have sparked the ember that will get you thinking about where to steer your ship.

aka, "some people suck but urbit has tools to begin to discourage shitty behavior" month.


The impetus for this post is the recent update that Urbit just rolled out: naive rollups for Azimuth, the public key infrastructure (PKI), of the network. If you didn't know already, Azimuth is this PKI that enforces the cryptographic fact that `your urbit is yours`. Unfortunately, bootstrapping this functionality meant temporarily lashing Urbit to Ethereum. The level and specifics of that disfortune vary depending on the perspective of the person assessing the dependency on Ethereum; Bitcoin maxies just hate any mention of ETH being useful, no-coiners get all confused about metamask wallets, and just about everyone is pissed about the gas crisis. Announced in 2021, 'The Gang Solved the Gas Crisis' was more than just an homage to Always Sunny, rather this undertaking outlined an exercise to enable a Layer 2 (L2) implementation of elements of the Azimuth contracts. This project was heavily discussed at Assembly, tested over thousands of transactions to clear bugs, and carried through until Valentine's day, 2022 when bridge.urbit.org was officially updated and L2 was made available to the masses.


L2 began with the kindness and sincerity we have grown accustomed to here on Mars; to say thank you to urbiters who have been hanging out on the network before the deluge of new L2 plebs, Tlon gave out some Valentine's. Custom invite pages for dedicated users to share with their friends and onboard new users without all the pain of Ethereum wallets, transactions, and gas fees. Thanks to everyone at Tlon who came up with this idea and executed it on a day that is supposed to be about love and joy and friendship.


Unfortunately, the combination of L2 bringing in new users, typical crypto-degeneracy, and many of us urbiter's forgetting how hostile people from PVPnet can be, the page that they created for me had a url like this: 

`https://claim.tlon.io/with-love-from/~sampel-palnet`


Now, as a person reading this I'm sure you say to yourself, "Oh, that's cool, they gave you a nice url with your `@p` in it." Yes. Yes, they did. And thank you for thinking such sweet thoughts. 


Now put your PVPnet glasses on and try again. In a world where your behavior is transient, where identities can be scrapped as they acrue shitty reputation, and communities are fleeting rather than persistent, your reassessment probably looks something like this: "Hey, some kind martian just sent me this url with free cryptographically owned NFTs... What if I just change `~sampel-palnet` to other prominent names on the network and see how many of these NFTs I can steal?"


Yea. So during the 2-3 hours when I first received my url link from Tlon, and when I could think about who would benefit from a free urbit planet, some shitbird claimed all of three of the planet invites that were on my custom landing page.







This post serves two purposes:
1. A reminder to those of us who have spent increasingly large amounts of our time on urbit over the past months and years, that PVPnet behaves differently. The network-wide, high-trust society that we once had may not be so network wide anymore.
2. To whoever stole:

A pox on your house. I don't care about the planets, they are three which were a kind gift among hundreds of thousands that are mine to distribute. But you stole from the 'give a penny, take a penny' tray and karma, the godhead, the witches coven down the street in Portland, and the Galactic Senate frown upon your soul.
To the new 'owners' of those planets, you have a week to reach out to me and pledge fealty. After that, your Martian life is forfeit.

How much consensus? How smart of contracts?

Bitcoin is a technology for decentralized consensus about global value allocation; often accompanied by the saying `fix the money, fix the world`.

Smart contracts are economically-incentivized, programmatically-enforced contract law; thus the saying `code is law`. 

Of course, Bitcoiners yell at the shitcoiners that all the other 'crypto-currencies' are scams or stupid or whatever. As they should, because Bitcoin and everything else are fundamentally different mechanisms and it is important to maintain the distinction. And shitcoiners yell at Bitcoiners that Bitcoin is slow, technologically stunted, can't do smart contracts, blah-blah-blah. As they should, because it doesn't do those things. But really both sides of this yelling match is midwit-tier analysis paired with a base human instinct for tribalism instead of understanding that these things are, and ought to be, different. But this isn't a piece about the Bitcoiners vs shitcoiners. Instead, it is a perspective on how L1 smart contracts should be perceived. 

So, lets just take as truth that there is a fundamental difference between Bitcoin and other Layer 1 blockchain protocols, reinforce that Bitcoin as the best 'money' needs to remain, global, permissionless, decentralized, and censorship-resistant; and attest that 'Smart Contract Platforms' (Ethereum, Solana, Cardano, Polkadot, take your pick of L1 networked protocols) may all have different competing use cases which may not need to be global, decentralized, or even permissionless, but that they are not as good of technologies for decentralized conensus about global value allocation. Agreed? Good. Let's continue on the topic of contracts. Specifically, those from the era of quill and ink to today.

What does the current legal contract landscape look like? Supreme Court cases, burdensome regulatory environments, small claims disputes... Sure, thats a part of it. But it is just the tip of the iceberg. The vast majority of the legal contract landscape is dark to the outside observer or anyone not a party to the agreement. IOUs between family members, rental/lease agreements, and even just verbal agreements to transact in goods and services. These are all contracts, most of which are fulfilled, and--even those which don't conclude with everyone fully satisfied-- settled without outside intervention. So what do we know about most of these contracts?
- No contracts need to be agreed upon by everyone in the world, and very few need to be globally transparent. Why would someone in Malaysia care about the terms of a contract for painting an apartment building in NYC?
- Conflict remediation is so expensive it is often not worth the effort or cost to pursue a formal judgement against a bad actor, so other mechanisms for dissuading negligent or malicous behavior are needed to reduce cost.
- Reputational impact in the marketplace is often used instead of formal remediation as an avenue for resolving conflicts.
- Most modern legal contracts are not globally enforced, rather they will come with a claim of jurisdiction which contains it's own ruleset.
- Real world contracts often give a lot of leeway to things that are unlikely (but not impossible) to occur.

These things haven't changed in hundreds of years, and while there is certainly room for improvement--whether in precision of agreements, lowering conflict resolution costs, or verifying authenticity of the parties--pushing everything about the contracting relationship into smart contracts isn't going to happen. Nor should it.
But muh-blockchain, muh-defi, muh-jpegs! Yeah, yea, yea. We get it, this technology is cool. Global State Machines are cool. I am not contesting that it will do really cool things. Transform finance, upend insurance markets, secure voting mechanisms. Fine. We should go and do all that. But we also need to have some perspective about where economic activity and human agreements occur. 

There are ~30M developers in the world, some tiny subset of that who understand developing smart contracts, and they are more expensive than lawyers (rightly or wrongly, and one could argue that they are the lawyers of the digital age). Comparatively, there are 30M small businesses in the US alone which regularly contract with counterparties in billions of different ways. And sorry, but those contracts aren't all going onto the global state machine because the gas / transaction fees alone would be more than the value of 99.9% of the contracts themselves. And for the ones that aren't? Now you'll have to go down into the weeds of auditing code for bugs, figuring out oracles for verifying prioprietary information or work completion, or bickering over specific snippets of code because if you can't get it exactly right, you don't have a contract at all. For the vast majority of contracts that aren't naval gazing finance derivatives, that just isn't going to work. If these are all that smart contracts become, then regardless of claims of 'decentralization', all that these platforms will do is move power from a concentrated group in the legacy system, to a concentrated group in the new system as they will be the only ones able to operationalize ideas through technical expertise and capital while everyone else is stuck on the sidelines.

That isn't to say we can't use modern technology to improve the day to day user experience of contracting. We absolutely should. But it means taking a step back from the hype and understanding the actual use case. So what do most legacy legal system contracts include?
- References for counterparties within a trusted network of contacts for market level reputational enforcement
- Generalizable formats from legal expects paired with agreement specific terms from contracting parties
- Contract execution mutually agreed to, but kept private to the parties, and mutual agreement of fulfillment conditions
- Jurisdicitonal State level escalation pathways and enforcement mechanisms.

Each of these mechanisms is be reassessed in the world of smart contracts, but the vision of the industry is somewhat clouded by the conflation of Bitcoin & it's properties (namely global consensus) with L1 smart contract platforms and their use cases (currently programmable money and NFTs). 

So to state it explicitly: 'Not everything requires global consensus'. 

Now, some chains are beginning to address this in a technical sense with sharding/helixes/graphs (take your pick of name or technical nuance), along with off-chain computation, naive rollups, or other tricks. But in the end, current L1 protocols and dApps are really only focusing on the escalation pathways and economic enforcement elements of what legacy contracts entail. They do that enforcement nearly perfectly. But extrapolate that out; what would the world look like if all contracts always needed to go to court, have a jury try facts, and then enforce a judgement? It would be a nightmare, even if assisted by computers and code. Our informal and formal systems of contracting evolved because they were most efficient given the technology of the day. Just because we have new technology, though, doesn't mean we should throw out centuries of learnings about how to create an efficient system for peer-to-peer agreements. What we need to do is build technology and solutions which take one of humanities greatest strengths--Our broadly pro-social behavior and ability to build trusted relationships--and supports that in an technologically advanced manner.

So let's assume enforcement and jurisdictional questions will sort themselves out (at that is what the 'crypto' industry is currently most focused on) and instead look again at the other list items, recharacterizing them slightly in the context of smart contracts.
- Persistent actors with networked reputations, rather than infinitely generateable unintelligible wallet or account addresses, and lasting reputation and efficiency gains for incentivizing ongoing contractual relationships including channels for publicizing positive and negative reputational information across a given market or community.
- Templatized contract terms which can be reviewed by professional experts once (lawyer and/or developer), and then have specific terms applied by subject matter experts (such as a sales person or product team) who have Microsoft Office-tier technical skills.
- 'Off-chain', peer-to-peer contract creation and agreement, with escalation pathways for reputational and potentially economic enforcement of terms, where the contract can be kept off chain if there is no dispute.

As humanity moves properly into the digital age, these are the problems that Urbit will help fix as a clean-slate OS for the 21st century. By providing a lasting and cryptographically owned identity, fundamentally linked to a functional deterministic operating system, with inbuilt peer-to-peer communications and encryption, Urbit offers a path for contract creation and enforcement much more in line with historical human experience and societal evolution. This means the possibility of an intuitive user experience that brings the economic activities of non-technical actors into a digitally native landscape. 

Stations

wordspace

Your business isn't yours

Eternal February

How much consensus? How smart of contracts?

Links

Stack Podcast