4 ms·

> The issue is that ethereum isn't the only option here - standard legal contracts exist, and are by far more common. The only real advantage ethereum offers is

> The issue is that ethereum isn't the only option here - standard legal contracts exist, and are by far more common. The only real advantage ethereum offers is the immutability aspect - that no one can go back and argue the contract is wrong or invalid. A court would not see it that way. Contract law would apply to these contracts if the parties to the contract sued each other. The legal system applies to all contracts, whether on Ethereum or not. Ethereum does not get to exist in its own reality outside of the law. Therefore, the immutability of an Ethereum contract won't matter very much, because a judge can still invalidate part of it, or all of it, if it contains unconscionable provisions, lack of disclosure, agreement to commit criminal acts, fraud or misrepresentation, simple mistakes, or any one of the many other reasons contracts can be rendered legally unenforceable. So, I don't see how immutability offers any advantage over standard legal contracts. It won't prevent the courts from determining that a contract is wrong or invalid.

pash 10y ago
You have vastly oversimplified the matter. In common-law jurisdictions, contract law pertains only to agreements which are made with the intent to contract, i.e., with the intent that the agreement should be enforced by law. In the case of agreements made without that intent, and particularly when an agreement explicitly stipulates that legal enforcement should not apply, common-law tradition says (with some major caveats) that a judge should dismiss suits related to the enforcement of the provisions of the agreement. Further, even in the case that a so-called "smart contract" is deemed to be subject to contract law (whether because the parties made that intention clear, or because their intention was vague and a judge consequently rules that to be the case), it is reasonable to argue that the intention of the parties was to be bound by the rules of the system in which they chose to express their agreement, e.g., within a system in which it is broadly understood that "the code is the contract", and that the execution of the code according to the parameters of the execution environment at the time of the agreement should dictate the outcome of the agreement. In other words, it is perfectly plausible from a legal point of view that a judge could find that the primary intent of the parties was to be governed by the rules of the system in which they chose to execute the agreement (e.g., Ethereum under its pre-fork consensus rules), rather than ruling on their intent at the lower level of the code expressing the contract itself. Such an interpretation would go little further than the already well established legal precedents of allowing contracting parties to bind themselves to the decision of an arbiter other than a court of law, or of one court acceding to the jurisdiction of another as stipulated by the contract itself. A judge might therefore plausibly rule in a way that enhances rather than degrades the promise of immutability in a technically enforced consensus system. That is, a judge might reasonably find that changing the rules of the game halfway though (e.g., with an unanticipated hard fork that changes the system's state or execution parameters) is contrary to the intent of the contracting parties, and that therefore the agreement should be interpreted under the rules of the status quo ante (pre-fork). One of the basic philosophical foundations of contract law, dating to Adam Smith, is that free people should have the power to bind themselves in enforceable agreements. There are many qualifications to this idea, but it an important justification for the existence of contract law and for the way it has evolved over the centuries: the whole point is that contract law should empower parties to make agreements and to be bound by those agreements, and (within some bounds) that includes the power to decide how disputes about the terms of those agreements are adjudicated. Choosing a mechanism of enforcement de machina rather than de jure fits into this philosophical framework just fine.
- twblalock 10y ago
  > In other words, it is perfectly plausible from a legal point of view that a judge could find that the primary intent of the parties was to be governed by the rules of the system in which they chose to execute the agreement, e.g., Ethereum under its pre-fork consensus rules. A judge might therefore plausibly rule in a way that enhances rather than degrades the promise of immutability oven by a technically enforced consensus system. Yeah, that could happen. A judge could also invalidate an Ethereum contract. But if a judge makes a ruling on an Ethereum contract, no matter what that ruling might be, that would prove that Ethereum contracts are subject to the jurisdiction of a judge in the legal system, just like other contracts, which proves my point.
  - pash 10y ago
    Your point, it seemed to me, was that a judge's decision would trump the blockchain's. My point was that a judge might decide (a) that he has no say, or (b) that what the blockchain says goes. In either case, the law would effectively trump nothing. If that proves your point, I suppose we might just as well say that the legal system is pointless, because physics gets a say, and what physics says goes—nevermind that the law does not purport to overrule physics. In the same way that physics does not make law irrelevant, the law does not necessarily make the blockchain irrelevant: the law could well recognize the authority of the blockchain. Call it the compatibilist argument.
DSMan195276 10y ago
Personally, I agree with you. I'm not really of the opinion that immutability offers any advantages, and I'm not using Ethereum myself. That said, I think the main idea is that no matter what a judge argues, nobody can modify the original contract in the Ethereum blockchain (That's the theory at least, as we've seen that's not the case). That's not to say something else couldn't be done, but as far as Ethereum is concerned the judge saying it is invalid means squat because that has no ramifications on the blockchain. You raise a good point though that in the end a judge could make any number of decisions outside of Ethereum, so Ethereum only provides so much "protection". Clearly, what a judge decides means much more then "squat" because it has actual ramifications on the people involved, even if it has no ramifications on the Ethereum blockchain itself.
- twblalock 10y ago
  The problem with this is that if a judge determines an Ethereum contract is unenforceable, but the blockchain does not change, then the blockchain no longer represents the state of affairs in the real world. If that happens, what is the blockchain good for? How can anyone be confident in it, or base decisions or future contracts on it, if it diverges from reality in such a way?
  - stale2002 10y ago
    A judge can say whatever he wants. That doesn't mean that he can necessarily do anything about it. There are tons of bitcoin addresses that we KNOW have been used to buy/sell drugs, for example, any address that has sent or received money from a silk road address. I am sure that these judges would LOVE to confiscate all of this money that is being used for illegal things. But they can't do shit. Because bitcoin has proven to be pretty robustly immutable. That is one such value of immutability. Unfortunately for ethereum, it seems to now be much more vulnerable to the attack vector of a government court order, whether that court order is from the US trying to crack down on pot purchases or donations to wikileaks, or China trying to crack down on payments to journalists that are critical of it.
    - 10y ago

pash 10y ago

You have vastly oversimplified the matter. In common-law jurisdictions, contract law pertains only to agreements which are made with the intent to contract, i.e., with the intent that the agreement should be enforced by law. In the case of agreements made without that intent, and particularly when an agreement explicitly stipulates that legal enforcement should not apply, common-law tradition says (with some major caveats) that a judge should dismiss suits related to the enforcement of the provisions of the agreement. Further, even in the case that a so-called "smart contract" is deemed to be subject to contract law (whether because the parties made that intention clear, or because their intention was vague and a judge consequently rules that to be the case), it is reasonable to argue that the intention of the parties was to be bound by the rules of the system in which they chose to express their agreement, e.g., within a system in which it is broadly understood that "the code is the contract", and that the execution of the code according to the parameters of the execution environment at the time of the agreement should dictate the outcome of the agreement. In other words, it is perfectly plausible from a legal point of view that a judge could find that the primary intent of the parties was to be governed by the rules of the system in which they chose to execute the agreement (e.g., Ethereum under its pre-fork consensus rules), rather than ruling on their intent at the lower level of the code expressing the contract itself. Such an interpretation would go little further than the already well established legal precedents of allowing contracting parties to bind themselves to the decision of an arbiter other than a court of law, or of one court acceding to the jurisdiction of another as stipulated by the contract itself. A judge might therefore plausibly rule in a way that enhances rather than degrades the promise of immutability in a technically enforced consensus system. That is, a judge might reasonably find that changing the rules of the game halfway though (e.g., with an unanticipated hard fork that changes the system's state or execution parameters) is contrary to the intent of the contracting parties, and that therefore the agreement should be interpreted under the rules of the status quo ante (pre-fork). One of the basic philosophical foundations of contract law, dating to Adam Smith, is that free people should have the power to bind themselves in enforceable agreements. There are many qualifications to this idea, but it an important justification for the existence of contract law and for the way it has evolved over the centuries: the whole point is that contract law should empower parties to make agreements and to be bound by those agreements, and (within some bounds) that includes the power to decide how disputes about the terms of those agreements are adjudicated. Choosing a mechanism of enforcement de machina rather than de jure fits into this philosophical framework just fine.

twblalock 10y ago
> In other words, it is perfectly plausible from a legal point of view that a judge could find that the primary intent of the parties was to be governed by the rules of the system in which they chose to execute the agreement, e.g., Ethereum under its pre-fork consensus rules. A judge might therefore plausibly rule in a way that enhances rather than degrades the promise of immutability oven by a technically enforced consensus system. Yeah, that could happen. A judge could also invalidate an Ethereum contract. But if a judge makes a ruling on an Ethereum contract, no matter what that ruling might be, that would prove that Ethereum contracts are subject to the jurisdiction of a judge in the legal system, just like other contracts, which proves my point.
- pash 10y ago
  Your point, it seemed to me, was that a judge's decision would trump the blockchain's. My point was that a judge might decide (a) that he has no say, or (b) that what the blockchain says goes. In either case, the law would effectively trump nothing. If that proves your point, I suppose we might just as well say that the legal system is pointless, because physics gets a say, and what physics says goes—nevermind that the law does not purport to overrule physics. In the same way that physics does not make law irrelevant, the law does not necessarily make the blockchain irrelevant: the law could well recognize the authority of the blockchain. Call it the compatibilist argument.

DSMan195276 10y ago

Personally, I agree with you. I'm not really of the opinion that immutability offers any advantages, and I'm not using Ethereum myself. That said, I think the main idea is that no matter what a judge argues, nobody can modify the original contract in the Ethereum blockchain (That's the theory at least, as we've seen that's not the case). That's not to say something else couldn't be done, but as far as Ethereum is concerned the judge saying it is invalid means squat because that has no ramifications on the blockchain. You raise a good point though that in the end a judge could make any number of decisions outside of Ethereum, so Ethereum only provides so much "protection". Clearly, what a judge decides means much more then "squat" because it has actual ramifications on the people involved, even if it has no ramifications on the Ethereum blockchain itself.

twblalock 10y ago
The problem with this is that if a judge determines an Ethereum contract is unenforceable, but the blockchain does not change, then the blockchain no longer represents the state of affairs in the real world. If that happens, what is the blockchain good for? How can anyone be confident in it, or base decisions or future contracts on it, if it diverges from reality in such a way?
- stale2002 10y ago
  A judge can say whatever he wants. That doesn't mean that he can necessarily do anything about it. There are tons of bitcoin addresses that we KNOW have been used to buy/sell drugs, for example, any address that has sent or received money from a silk road address. I am sure that these judges would LOVE to confiscate all of this money that is being used for illegal things. But they can't do shit. Because bitcoin has proven to be pretty robustly immutable. That is one such value of immutability. Unfortunately for ethereum, it seems to now be much more vulnerable to the attack vector of a government court order, whether that court order is from the US trying to crack down on pot purchases or donations to wikileaks, or China trying to crack down on payments to journalists that are critical of it.
  - 10y ago