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What is the advantage in creating an Ethereum smart contract over a regular contract in our legal system (using a lawyer and some pen and paper)? If code has b

What is the advantage in creating an Ethereum smart contract over a regular contract in our legal system (using a lawyer and some pen and paper)? If code has bugs (and sufficiently complex code will always, always, always have bugs) you simply have to suffer the consequences (sorry for your loss) or the entire community can choose to execute a hard fork and rewrite history (see DAO). If a vanilla legal contract has some typos or even some semantic differences that lead to ridiculous outcomes, lawyers and judges will hash it out. People, not computers, make the final decisions in our legal system, so human errors are mostly tolerated. If I sneak a clause into a contract saying that the other party must pay me their entire salary every year, it would be voided in an instant. Not so if placed in a "smart" contract. Perhaps you could say that Ethereum is better than our legal system because it's decentralized. But I don't think it's enough to say something is better simply because it's decentralized. Why should I be afraid of a centralized legal system? We elect politicians, who choose judges (who have to be confirmed by legislative bodies whose members we also elect). Sure, it's not perfect, but it's hardly the tyrannical system that would make me turn to the bug-ridden wild west of Ethereum smart contracts. I think the only reasonable argument in favor of Ethereum contracts is that they are easier to create (less friction, don't need to hire a lawyer, etc), but that's hardly a good thing. Real life contracts are expensive for a reason, not because Rothschild & Co. have some other nefarious plans. You need lawyers to write good contracts and think through their consequences, as well as reasonable, human judges to decide issues when they arise. Ethereum, to me, seems a purely ideological creation, not one rooted in actual needs that people have. Sure, it's decentralized and immutable (unless a contract hurts the wrong people, lol) but did anyone really want that (except for those with ideological reasons, i.e. libertarians)? Not trying to start a flamewar, I just want to hear a strong opposing viewpoint on this.

jurandom 9y ago
I think the term "smart contract" is a misnomer. Sure, you could write a code similar to one I use: Store money and confirm that I am alive every year (by means of me sending a transaction to the contract). If I don't send this transaction, all money is released to my daughters account. This looks like a standard contract. Now, dApps (distrubuted applications) also use "smart contracts" as the backend, but they do so much more than act as "contracts". For example, Golem is a computation market, Augur is a prediction market, etc. There is a whole universe of applications that can be written on Ethereum that do not quite fit under a simple "contract that you can write using a lawyer and some pen and paper" umbrella.
- gus_massa 9y ago
  How much money does the contract have? If it has enough money, it's an interesting target for a cyberattack. Let's hope we have to wait a long time until you die. Can one of you daughter change her receiving address meanwhile? Can you change it? (Perhaps someone stole her laptop with the wallet.) Did you (1) write the code, or (2) copied it from ethereum.stackexchange or (3) use a webpage that writes the smartcontract for you? Are you sure the contract has no bugs??? Can someone else change the her receiving address? (1) If you write the code, probably nobody else review it. Let's hope it has no bugs or it's small enough to be unnoticed. (3) If many people are using the same code, and someone finds a bug it can be used to steal the money from all the contracts. So you get hopefully more code review from the creator and users, but also more unwanted code review. (2) If you just copied the code from a forum or something, you can have the best or the worst case of the previous scenarios, I'm not sure. One "feature" of Bitcoin is that the programming language is so horrible that nobody tries to write code in it. So you have a few types of standard transactions (send money, post a message burning a small amount of bitcoins, ¿multisignature wallets?, ¿¿escrow service??) but all (most) of them are extremely straightforward and extremely carefully reviewed.
smokeyj 9y ago
Ethereum is a bet that contracts will be able to become digitized, decentralized and trustless to a greater degree. Forget about the technicalities for a second. If it's theoretically possible - what's the value of that tool? In theory you could deploy a democracy as a contract. You could deploy a currency with a deterministically democratic central bank. You can create crowdfunded employee-owned work communes that pay dividends to member holders. From a global perspective, if you ask yourself - is there anywhere that could benefit from such a system - and the answer is "yes" - then I think crypto is a great hedge against legacy systems.
Jabanga 9y ago
An Ethereum smart contract can be automatically executed, with no party, including no government, being able to stop that execution. The weaknesses you noted are serious and limiting, but that doesn't mean an automatically executable contract has no value.

jurandom 9y ago

I think the term "smart contract" is a misnomer. Sure, you could write a code similar to one I use: Store money and confirm that I am alive every year (by means of me sending a transaction to the contract). If I don't send this transaction, all money is released to my daughters account. This looks like a standard contract. Now, dApps (distrubuted applications) also use "smart contracts" as the backend, but they do so much more than act as "contracts". For example, Golem is a computation market, Augur is a prediction market, etc. There is a whole universe of applications that can be written on Ethereum that do not quite fit under a simple "contract that you can write using a lawyer and some pen and paper" umbrella.

gus_massa 9y ago
How much money does the contract have? If it has enough money, it's an interesting target for a cyberattack. Let's hope we have to wait a long time until you die. Can one of you daughter change her receiving address meanwhile? Can you change it? (Perhaps someone stole her laptop with the wallet.) Did you (1) write the code, or (2) copied it from ethereum.stackexchange or (3) use a webpage that writes the smartcontract for you? Are you sure the contract has no bugs??? Can someone else change the her receiving address? (1) If you write the code, probably nobody else review it. Let's hope it has no bugs or it's small enough to be unnoticed. (3) If many people are using the same code, and someone finds a bug it can be used to steal the money from all the contracts. So you get hopefully more code review from the creator and users, but also more unwanted code review. (2) If you just copied the code from a forum or something, you can have the best or the worst case of the previous scenarios, I'm not sure. One "feature" of Bitcoin is that the programming language is so horrible that nobody tries to write code in it. So you have a few types of standard transactions (send money, post a message burning a small amount of bitcoins, ¿multisignature wallets?, ¿¿escrow service??) but all (most) of them are extremely straightforward and extremely carefully reviewed.

smokeyj 9y ago

Ethereum is a bet that contracts will be able to become digitized, decentralized and trustless to a greater degree. Forget about the technicalities for a second. If it's theoretically possible - what's the value of that tool? In theory you could deploy a democracy as a contract. You could deploy a currency with a deterministically democratic central bank. You can create crowdfunded employee-owned work communes that pay dividends to member holders. From a global perspective, if you ask yourself - is there anywhere that could benefit from such a system - and the answer is "yes" - then I think crypto is a great hedge against legacy systems.

Jabanga 9y ago

An Ethereum smart contract can be automatically executed, with no party, including no government, being able to stop that execution. The weaknesses you noted are serious and limiting, but that doesn't mean an automatically executable contract has no value.