How to Help Non-Coders Feel Comfortable Signing a Smart Contract? Introducing Smart Translations

If you know anything by now it is that smart contracts are written in computer code and should have a minimal amount of English.  If we stay true to this, then there is a challenge.

If non-coders can’t read computer code, why should they agree to contracts written in computer code?

A good rule of thumb in life is “don’t agree to anything you don’t understand” – someone should have said this already.  If not I’ll gladly, err… humbly accept credit.

Luckily, with Smart Translations, people can understand smart contracts even if they are written entirely in computer code.  In this article, we will discuss what smart translations are, what factors affect someone’s willingness to sign a contract, and how such a translation can be produced.


What are Smart Translations?

Some parties who sign smart contracts will be non-coders.  Therefore, there will be a need to translate the code of smart contracts into human language. In this article, we will refer to human language as English. Any translation will need to include the following:

  • Audit.  An audit of the smart contract’s vulnerabilities, including to malicious or erroneous behavior.
  • Jurisdictions.  Lists of jurisdictions in which the activities entailed by the smart contract are necessarily legal, in which they might be illegal depending on circumstances specified, and in which they are necessarily illegal.
  • Literal translation.  A literal translation of the smart contract’s terms to English.

Even if a complete translation is present, two further problems remain:

  1. Translation uncertainty.  The parties might be uncertain about whether the translation is accurate.  Solutions to this problem are provided in this article.
  2. Interpretation by the traditional judicial system.  Suppose a smart contract has a human-language translation.  Then if one party to the smart contract initiates a dispute in the traditional judicial system, it is uncertain whether the smart contract or its translation will be enforced by a court.  This is a problem because the two might be interpreted differently. I am addressing this problem in a future post, link to come.


Factors Affecting Someone’s Willingness to Sign a Smart Contract

Suppose you speak English and are unable to read code.  You are asked to sign a smart contract and are shown an English translation of the smart contract.  Whether you trust the translation enough to sign the smart contract depends on several factors, including:

  • Unchangeable factors.  These are factors that can’t be modified without substantially altering the smart contract.
    • Size.  Size and complexity of the transaction.  The smaller the contract the less risky it is; therefore, more signable.  This also applies to complexity; the lower the better.
    • Reputation.  A good reputation of the multisided platform and the parties to the smart contract increases trust in the transaction.
    • Volume.  The higher the number of people who have entered into the same transaction relying on the same translation, the better.
    • Time.  The length of time for which the multisided platform has been initiating similar transactions. The more the merrier.
  • Changeable factors.  These factors can be modified without substantially altering the smart contract.
    • Accountability.  Whether anyone will be held accountable if the translation is found to be inaccurate, and the extent of the accountability. The more accountability the better.
    • Remedy.  Whether you have a remedy if the translation is found to be inaccurate, and the magnitude of the remedy. You’re getting the hang of it, right?


How Changeable and Unchangeable Factors Affect Willingness to Sign

The Unchangeable Factors and Changeable Factors for a smart contract can be characterized as either “hurting” or “helping” the likelihood the parties will sign the smart contract. The diagram below explains the relationship between Changeable and Unchangeable factors:

Effect of Unchangeable and Changeable Factors on Deal Feasibility

As mentioned above, Unchangeable factors – such as the size of the contract, your reputation, the volume of people, and the length of time – can help someone become willing to sign a contract. They also limit the impact of negative Changeable factors such as low accountability or remedy if the smart translation is found to be inaccurate.

Let’s say you just started painting people’s houses and you want to convince your neighbors to let you paint their house for $200. In this case, the Unchangeable factors are as follows:

  • Size: the contract is only for $200 so there isn’t much to lose if something goes wrong.
  • Reputation: your neighbors may know you as a person, but not as a painter. They may still trust you… since they know where you live.
  • Volume: You just started, so not much here.
  • Time: Not much, you’re new.

You then ask them to sign a smart contract and offer to have a smart translation produced.  At this point, you don’t have much to go on, so your neighbors might be unwilling to let you paint their house. Luckily there are Changeable factors that you can, well, change.

  • Accountability. In this case, you can reassure them of what happens if the smart translation is not accurate — that is, if it says something other than what was agreed upon.
  • Remedy. You could say that if the translation is found to be inaccurate, they will get their money back.

At this point, your neighbors will be stupid not to take this deal!

Keep in mind that because introducing Changeable Factors that “help” has a cost (i.e. refunds or extra money), Changeable Factors should be introduced to the extent (and with a magnitude) that are proportionate to the extent that the Unchangeable Factors “hurt.”

This means that you shouldn’t offer more than is necessary to satisfy a person’s concerns, which in this case is your lack of reputation, low volume and time. The transaction is only $200 so don’t offer to replace your neighbors’ furniture or build them a pool if there is a problem with the translation. Only offer enough to satisfy their concerns.


Who Can Produce Smart Translations?

Translations can be created by the following parties:

  • Automated translation.  A smart contract editor that allows non-coders to create smart contracts could automatically generate a translation of the smart contracts it generates.
  • Contract writer.  The contract writer, the multisided platform that brings the parties to the smart contract together, or a company directly hired by them could create the translation.  
  • Common Accord.  Common Accord is a non-profit open organization that creates smart contract templates and translations for those templates.  A limitation of Common Accord is that contract writers will often wish to modify the Common Accord smart contracts, in which case their translations will no longer be completely accurate.
  • “Smart Translation” market.  There could exist a market where multiple entities create competing smart translations for any given transaction smart contract.  If you combine this concept with market-based translation insurance, you could expect that more accurate translations would fetch lower-cost translation insurance.  


When to Produce Smart Translations?

We propose the following order for the development of a transaction smart contract and its translation:

  1. Outline.  This is an outline of terms, such as a terms sheet.
  2. Specification.  This is a rigorous specification of the terms, written in pseudocode.
  3. Transaction smart contract.  This is a conversion of the specification’s pseudocode to code.
  4. Human-language translation.  This is a conversion of the code to human language.

To ensure that a smart contract is as accurate as possible it should first be written in code. Only then should a smart translation be created.

There are different smart translation solutions with varying levels of changeable factors. I’ll go over the different types of smart translations in a later post. Link to come.

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