• Chip was involved in AMIX in the late 1900s, when there were services known as “online information services.” These services usually either charged hourly for access to information being shared by others or charged for information the service itself was providing.
• AMIX’s big idea was to let users sell stuff to each other. The big marketing challenge was how to get across to users that they may MAKE money using this service!
• In running the exchange, we learned some things

   

“Mixed” Contracts

• To come to an agreements around information sales and purchases, it was found that a mix of machine-automated and human interpretation were going to be necessary to capture the complexities of the arrangements.
• Example: I hire you to do a marketing study!
• We see that some stuff can be done by machines (like delivering the files and transferring payment) and some stuff cannot (like… the actual study content).
• We see that some stuff can be monitored by machines (like delivery date) and some stuff cannot (like deliverable quality).
• This situation calls for a “mixed” contract: some automated and some human interpretable prose. To arrive at such a contract, a process of Structured Negotiation was developed.

   

Structured Negotiation

• Through Structured Negotiation, contract terms are arrived at through negotiation, with agreements and commitments captured along the way. Just as with traditional contracts, much of the bulk of the document will be concerned with what to do when things go wrong, up to and including renegotiation clauses.
• You end up with a fully structured mixed contract and an historic audit trail of how the contract took shape, which can dramatically lower the cost of dispute mediation. When you lower the cost of dispute, you lower the risk in engaging in the contract, which hopefully leads to wonderful arrangements!

   

Context is King

• In the world of digital information, it can be tricky to give a customer a good idea of what they’re getting without actually giving it to them. The key is as much contextual metadata as possible.

  

Discussion:

• Show and tell: an AMIX contract from 1984
  • 
  • Amazing that we now how Reddit, UpWork, Fiverr, and other on demand information markets that make things so easy
• Something key from the AMIX contracts: “Change in Defaults” AKA what happens under inaction? Could you talk about this?
  • Chip: In some situations you would have automated payments set up, which could default to “approve.” This puts the onus of action on the payer not the payee. The provider can worry less about flaky clients, and the customer can set it and forget!
• Seems there’s a natural synergy between mixed contracts and Agoric’s “Higher Order Composability”. As those options move from place to place, you could renegotiate the contract a little bit in automated fashion: have you thought about this?
  • Chip: Back in the day we were very much constrained by technology that could do that, we were building it all custom. The dispute mediation process is sort of an example of this: it’s using the contract framework turned in on itself to handle issues.
  • This is a space that has not been well-explored because there are not a lot of vehicles for that exploration yet.
• Was AMIX running a huge dispute system? Jurors? How was this actually done?
  • Chip: Well, there weren’t THAT many disputes that required arbitration. The common complaints and failure modes were handled by the negotiated contracts and the architecture of the market application itself.
  • For the disputes that did require mediation, we worked with professional dispute service companies to engage mediators. They were given the information about the contract and the parties and made decisions.
  • This did not happen very much, in large part because of the pathways for recourse precluded the need to trigger it.
    • same idea: The offer of the bonus does the lifting, not the bonus itself, much like bank insurance prevents bank runs with peace of mind.
• What did the legal world think of AMIX at the time? In my experience with smart contracts recently, the legal world is quite dismissive of smart contracts.
  • Chip: We may not have actually used the term “contract” to identify these agreements… We talked about agreements, negotiation, other legal terms. We had a layman-accessible customer agreement that customers entered into when using the platform as well.
  • We did talk to lawyers about the potential impact of these ideas on law: the ones we talked to were intrigued (though there may be a selection bias)
• The term “split contract” was developed later on to differentiate these hybrid contracts in the AMIX-style from the “smart contracts” being worked on by Nick Szabo.