Ethereum

Smart Contract Business Drivers: Herstatt Risk (Blockchain Report Excerpt)

Herstatt risk or settlement risk is the risk that a foreign exchange rate will change after a contract is locked in at a specified amount of a specified currency. Obviously this is a two-way risk, as if the exchange rate goes up, the buyer will pay more; and if the exchange rate goes down, the seller will receive less. The more volatile the currency and the longer the time until settlement, the greater the risk.

Smart Contract Business Underpinning (Blockchain Report Excerpt)

A smart contract that involves contracting a payment for services to be rendered or a product to be delivered involves three separate accounts: a purchaser, a seller, and an escrow account. Escrow is a means of creating trust in a contract where there is none. In an escrow situation, a third party holds something of value from the purchaser until a certain condition is met by the seller, at which time they deliver the thing of value to the purchaser.