Kassandra Learn: What is the Social Contract? (Part 2)

Kassandra Learn: close up image of a man signing a contract in the supervision of another man in a tweed suit. Both signatures are required for the contract to be complete.

In a Nutshell…

We exist in the world around us by negotiating a number of different social contracts as a part of our everyday lives, whether we are aware of this or not. Our society functions because of the contracts and agreements we have with other people, formal and informal, written and unwritten, legal or simply social norms. This includes: payments for goods and services, employment, marriage, laws, agreements, investments, and even taxes.

Trust and the Social Contract

Our implicit trust in the agreements between ourselves and others is what allows the social contract to function. Agreements and contracts exist both formally and informally between all members of society, following different norms and applicable laws is what allows society to function properly. Of course, it is sometimes necessary to invoke an authority to make sure these contracts are enforced. (For example, if an employer stopped paying you and there wasn’t anything you could do about it, you would quickly have to find another employer.)

Crypto Technology and the Social Contract

This is where crypto currency and crypto assets can make a difference. Bitcoin, for example, is already a proven practical example of a currency that isn’t issued by a central authority or government bank or mint. With modern crypto currencies, there’s no single issuer or producer who controls the supply and restricts their usage. All of the code and rules regarding production and the use of a crypto currency to mediate contracts are a matter of public record via a transparent and accessible Blockchain record. Modern crypto means that, if anyone so chose, they would be able to audit and understand the details of any transaction, and the production and trading of any asset.

Smart Contracts and the Social Contract

Modern crypto technology now gives us the option to write and enter into contracts at a peer-to-peer level through the use of Blockchain-enabled “smart” contracts. These mean that individuals can create and enforce contract rules without necessarily involving or even needing a third-party arbitrator.

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