Bigbom Digital Contract Platform Technical Paper¶
This technical paper describes how a contract is being established between parties, and how Bigbom Digital Contract Platform will implement it’s idea to implement a decentralized digital advertising ecosystem via smart contracts.
A brief history on contract signing¶
Paper Contract: The oldest, most popular method for establishing business relationship. Usually it requires two people, representing their organization or themselves, in order to sign the contract. Some contracts requires a 3rd-party as the validator. Once signed, both parties is obliged to follow their duties, written in the contract. Whether a dispute happens, it will be resolve using the law of country that is designated in the contract.
One of the biggest problem with a paper contract is geography distance. Imagine Bob, which lives in New York and need to do business with a partner in South Africa, he has to travel approximately 15 hours in order to get to Johannesburg, took another day to meet the partner and sign to the contract, then take another same long flight back to New York. What happens if his partner suddenly changes his mind, refusing to sign into the contract? What happens if he’s gone rouge, and ran off AFTER took your money? Is Bob gonna hire a lawyer to bring him to the court, and then paying all the expenses until he able to get the money back ?
With the development of internet communication, paper contract is less and less importance for a business, since it’s show its weakness in cost and execution. That’s why Digital Contract was invented
Electronic Contract aka Docusign and friends: With the development of internet applications and cryptographic algorithm, e-signature solutions was developed to give users the capability of signing contract without having physical presence. One of the leading solution of e-signature is Docusign, which provides a Software-as-a-Service signing solution. Signing a contract now requires just a few steps:
- Uploading a contract under digital format, eg PDF or word format
- Send an invitation link to signers. Each signer requires to create an e-signature
- Sign the document. The signed document then available for both parties, with the e-signature stamped on the document.
With e-signature, Bob now does not need to spend 30 hours in airplane, and he still can do business with his partner in Johannesburg. But the problem still persist. There is no guarantee that his partner will follow his obligation in the contract. Geographic problem solved, but what about execution problem ?
The introduction of Bigbom Digital Contract¶
Bigbom Digital Contract is a blockchain-based solution built with the aim of solving the contract signing and contract execution problem using a single platform. By combining the power of blockchain and e-signature, Bigbom Digital Contract will help people doing business together, with less worries about the authenticity of the contract, and the payment part of the contract. Let’s take this scenario to see how Bigbom Digital Contract is going to work.
Mandy is an advertiser, and she wants to run an ads campaign on John’s website, https://thefamousjohn.com. Through direct contact, John is offering Mandy a Cost-Per-Click campaign, with the total 100,000 clicks on a banner sitting on top of John’s website. The cost per every click is agree at 0.05$, which means it will cost Mandy $5000 for the whole campaign, expected to run in 15 days.
Here is how Bigbom Digital Contract is going to take place.
John will draft a contract, with all the terms included. After that he will start uploading the contract, using PDF format into Bigbom Digital Contract platform. John then send an invitation to Mandy to her email address, asking Mandy to review and sign the contract. After John and Mandy signed the contract, Bigbom Digital Contract platform will calculate the hash of the document and store it into blockchain using a smart contract. By using this, signed data is permanent, and both John and Mandy can re-check the authenticity of the contract anytime.
Below is the workflow for signing a document by using smart contract:
- docHash is a sha3 hash from uploaded pdf. Notes that the hash is not on the file, but on the contents itself. An example code in python
>>> Web3.sha3(0x747874) >>> Web3.sha3(b’\x74\x78\x74') >>> Web3.sha3(hexstr=‘0x747874’) >>> Web3.sha3(hexstr=‘747874’) >>> Web3.sha3(text=‘txt’) HexBytes(‘0xd7278090a36507640ea6b7a0034b69b0d240766fa3f98e3722be93c613b29d2e’)
- Now with the docHash, a person with a Ethereum private key could easily sign it. The result will be a signature of the docHash. Only the owner of signed address is able to verify signature.
- An Ethereum smart contract is responsible for store and query the list of signer. By validating the signer list, we can know if a document has been signed by other parties or not.
Digital Contract Verification & Payment:¶
For contract execution, there are two key factors: Verifies that the contract has been executed as agreed, and proccessing the payment. For tracking the execution of the contract, Bigbom Digital Contract allows to update the contract progress via different methods, depends on the contract type. The general lifecycle is being describing in below image:
A vital part for both Advertisers and Ads Platform/Publisher is they have to able to know how much their budget has been spent, and how much the is the progress of the campaign. By using smart contract, both parties will be able to traceback to their historical data through the contract, since all data is immutable and transparent for both sides.
Digital Advertising Campaign type and metrics:
Cost-Per-Click Ads (CPC): A Cost-Per-Click Ad represents the cost to the advertiser everytime someone click to their ads. Most of online ads platforms requires a target cost-per-click for new campaign to run.
Cost per Click formula:
Cost-Per-Mile (CPM): The “cost per thousand advertising impressions” metric (CPM) is calculated by dividing the cost of an advertising placement by the number of impressions (expressed in thousands) that it generates. CPM is useful for comparing the relative efficiency of various advertising opportunities or media and in evaluating the overall costs of advertising campaigns (definition source)
Cost per Mile formula:
Cost-Per-Install (CPI): Cost Per Install campaigns are specific to mobile applications. In a Cost Per Install campaign, publishers place digital ads across a range of media in an effort to drive installation of the advertised application. The brand is charged a fixed or bid rate only when the application is installed. (definition source)
Cost per Install formula:
When an advertiser wants to buy a slot for their campaign, they will have to consider about their target and budget , meaning that they will select which network that is able to provide the maxium target with the fixed budget cost. In some other cases, some advertisers just want to reach their target, and they’re willing to spend the exact amout of budget that is able to reach their target. Let’s try to imagine if a digital ad contract is a computer software function with a set of parameters, that function will likely has these parameters:
- Signed copy of the contract terms (as legal material)
- Contract start date
- Contract end date
- Agreed target (amount of clicks, impressions or installs)
- Minimum guaranteed target (for contract violation term)
- Current milestone (current amount of clicks, impressions or installs)
- Current spending
With a contract-as-code design, it’s very easy to both advertisers and ads platforms/publisher to track and viewing the progress. In practice, many ads platform and publisher is already implementing their own system to tracking and updating their progress to their customers. However not all system is bullet-proof with cybersecurity crime, and the cost of keeping data availability is not cheap at all. For a long time, most of enterprises is depending into expensive systems/storages in order to achieving this.
Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.
By using smart contract, all of these parameters will be stored inside the smart contract. Since blockchain is immutable by itself, it’s very easy for both parties to query all the historical data (through the transaction id) and validates with the actual results. Bigbom Digital Contract provides a set of contract templates that suits to each scenario, whether you want to run your campaign with a specific target, or you want to join to a real-time bidding system with a specific amount of budget.
Once these terms has been put into the smart contract. Bigbom Digital Contract platform will start to monitor the campaign, and consequentaly update the campaign into the smart contract, until it ends. At this point, both Mandy and John is aware about how well the campaign was, and what should be the actual cost.
Following workflow is describing how contract-as-code works:
Payment: Payment is a very complex topic. With a Digital Advertising Campaign, the actual bill is depends on various factor, like the actual amount of clicks or installations.
We’re currently developing our smart contract in order to support following payment method:
Due Date Payment: The final payment amount will be determine at the contract end date. Based on the current result, Our smart contract will determine the exact amount of payment for the seller side.
Pay as you go: A prefer payment method for most online platform is charging their customer based on the progress. Currently our smart contract is supporting daily payment. The amount of payment is determined by using the progress of previous day, for calculating how much the seller side will get.
Generally speaking, the contract will end up in these scenarios:
a. John get paid based on what he delivered, for example $3500 for 70,000 clicks after 15 daysb. John get paid full amount of $5000, if he able to deliver 100,000 clicks or more after 15 daysc. John does not get paid at all, since he’s only able to deliver 9,000 clicks, and in the contract they both agreed that if the target dropped below 10%, Mandy won’t have to pay anything.
Bigbom Digital Contract is able to adapt with all these scenarios. Before the contract goes into effective, it is required that Mandy needs to make a security deposit into the contract. The amount of security deposit is negotiable between Mandy and John. Bigbom Digital Contract will evaluate the amount of deposit and calculate the worth of clicks or installations that is equal to the amount of desposit. Since the campaign stats is constanly being monitored by Bigbom Digital Contract Platform, Mandy and John is able to see how much money has spent for the campaign. Before the deposit is being depleted, Bigbom Digital Contract Platform will notify Mandy for making another deposit, in order to keep the campaign running. If Mandy refuses to make the deposit, John will get a notification, suggesting him to suspend the campaign.
Even if Mandy keeps the commitment and send the security deposit, there is a possibility that John is not able to fulfill the contract terms, for example he cannot deliver more than 10,000 clicks after 15 days. In this case, since all the security deposit is being kept by the Digital Contract, John will receive any money, and at the end of the campaign, Mandy will get a refund, if the refund condition is met.
A demonstration for this payment process is as following:
Fiat/Token conversion: One of the biggest obstacle for people when using blockchain products is volatility in price. Imagine a token with a price $0.02 today become $0.05 tomorrow, and then drops back to $0.01 the day after. With the majority of people still using fiat currencies for daily trading, this volatility is unacceptable and prevent them to adopting blockchain products. With the aim to create an entrance for fiat users, Bigbom Digital Contract Platform is developing a method that calibrates the amount of actual BBO Token should be paid before the actual payment happens, so people will be kept away from the volatility in price. Here’s how it works
Scenario 1: Mandy is a BBO hodler, and John acccept BBO for his payment. This is a very straight-forward case, Mandy will make the deposit by BBO, and John will get paid by BBO as well.
Scenario 2: Mandy and John is not BBO holder, and they want to settle the contract in fiat, for example USD Dollar. Bigbom Digital Contract Platform will ask Mandy for making the deposit in fiat, by sending money via a payment gateway. After receiving the deposit, Bigbom Digital Contract Platform will calculate it to the actual BBO Token amount based on the market price, and took an amount of BBO equivalent to the original amount, multiplying with a factor of 2 from the Bigbom Reserve, then sending it to the Digital Contract as the deposit. The reason behind multiplying to a factor to ensuring that Bigbom Digital Contract platform is able to endure the price changes up to two times on market price each time payment term is being triggered.
Once the contract finished, Bigbom Digital Contract Platform will re-calculate the actual amount of BBO needed to pay, based on John’s performance and current market price. At the end of the day, John will receive the amount of BBO with similar value into USD Dollar that he supposed to get from Mandy. By integrating with other exchange platform, John will have the capability to swap BBO into Ethereum/Bitcoin, or even Fiat currencies after he received it.
At current phase, we will support USD and SGD as accepted fiat currencies, and will integrate with Kyber Network for swapping BBO to ETH. More currencies and swapping method will come in the future.