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Whether or not you (or anyone else) think the law should influence the outcome of smart contracts...it certainly does. So far a few states (US) have passed law

Whether or not you (or anyone else) think the law should influence the outcome of smart contracts...it certainly does. So far a few states (US) have passed laws regarding "blockchains", "smart contracts" and the like. For example, seeking to avoid any legal uncertainty surrounding blockchain transactions and smart contracts relating to certain digital assets, Arizona passed HB 2417, the following on point: - A very specific definition of “blockchain technology” as a “distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless” and provides that the “data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth.” -A definition of “smart contracts” as an “event driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger that can take custody over and instruct transfer of assets on that ledger.” Other states in various stages of legislation on point include: Maine, Illinois, Nevada, Delaware and Vermont. interesting notes: Arizona also passed a seperate law restricting the use of blockchain as "fire arm tracking technology", likely a pro gun rights lobbying effort. Delaware will likely be codifying by statute the right to issue stock on blockchains. Courts have begun accepting blockchain entries as business records under the rules of evidence. This whole notion of smart contracts being exempt from judicial review is crazy. I mean if I sign a regular contract to go sky diving and "waive all rights to sue in the instance of negligence" and they forget to pack my shute and die, the contract is express and speaks for itself but guess what, it's unenforceable, no one can contracts away negligence (no matter what the contract/smart contract says). Murder for hire; no competes in California, these things do not go from illegal/unenforceable contractually to legal because they are outside the jurisdiction of the courts.

jacquesm 9y ago
It's not about whether or not it should, I'd be happier living in a world where they can be, but since the whole goal is that it can't and there are people working really hard on trying to achieve that goal it would be more realistic to adjust to the eventuality that it will at some point be done. The biggest stick that governments have is that they could make it illegal for their constituents to engage in smart contracts with some kind of very large penalty. But other than that I don't really see what could be done about it once they are a fact. Just like laws of nature do not care about what a judge thinks math does not either. Trying to overrule smart contracts from the bench is if they actually work roughly akin to outlawing math. And yes, murder for hire is a serious potential problem, but murders for hire already happen in the world as we have it today so the existence of smart contracts is not going to be an enabler in this respect, hiring someone to kill for you is illegal, whether you use a smart contract or a verbal agreement is not really relevant to that, it's the act that is illegal, not the means of codifying the arrangement.
- will_brown 9y ago
  Smart contracts are not laws of nature, they are contracts. I totally agree you could come up with a few examples where enforceability would be a practical impossibility, but that's also the case with standard contracts. Just like the Arizona law I cited restricting use of smart contracts for "fire arm tracking", the law could restrict smart contracts in all sorts of ways to protect the public. Examples: -drafters of smart contracts must be licensed and bonded/insured -parties to smart contracts must purchase insurance to coverage sufficient to cover losses in full -criminal liability when marketing materials are inconsistent with the smart contract itself (see: DAO) -just like many contracts, deeds, trusts must/can be filed with the state...the states could require the same of smart contracts Now I understand such laws undermine the purpose/intent of many smart contract opponents, but my point is judges/legislature are not powerless insofar as the laws of nature.
  - jacquesm 9y ago
    > Smart contracts are not laws of nature, they are contracts. No, they are software. And the participants to such a contract have agreed that the execution of that software is the entirety of their transaction. If one of the parties changes their mind after the fact they will have to convince a judge first that even though they initially agreed that the execution of the contract was the entirety of the agreement that now this is no longer the case and that what they said was un-ambiguous before is now ambiguous and needs overriding. So now you have a fairly complex situation: - you will have to convince the judge that you entered into that contract and now wish to back out of the defining clause on something that is not classed as 'regret' (which is never a reason to annul a contract) - you will have to find a way to communicate the judge what relief you feel will compensate you at a level that the judge will be able to enforce (this could be very difficult) - and on top of that you will have all the usual issues you have to deal with in a lawsuit possibly complicated by your counterparty being anonymous and/or in an entirely different jurisdiction States don't really matter here, smart contracts are software and are global, that changes their nature in a material way which will make it hard (possibly impossible) for a judge to enforce them one way or the other.
ricksharp 9y ago
Wow, that's the best definition I have heard for Smart Contract (and maybe for Block Chain). I never thought a legal definition would be clearer than every "common" definition I have read. It's like the author of every blog post I've seen titled "What is Ethereum?" has no idea what title they used. I guess that just shows how hype makes it hard to get to the truth.
- jacquesm 9y ago
  But it is only a local definition. Some other legislative body might make a different one.
- throwawayjava 9y ago
  Agreed. For all the hate that lawyers and judges receive, they are as good as mathematicians at coming up with (or at least recognizing and choosing) concise and simple definitions.

jacquesm 9y ago

It's not about whether or not it should, I'd be happier living in a world where they can be, but since the whole goal is that it can't and there are people working really hard on trying to achieve that goal it would be more realistic to adjust to the eventuality that it will at some point be done. The biggest stick that governments have is that they could make it illegal for their constituents to engage in smart contracts with some kind of very large penalty. But other than that I don't really see what could be done about it once they are a fact. Just like laws of nature do not care about what a judge thinks math does not either. Trying to overrule smart contracts from the bench is if they actually work roughly akin to outlawing math. And yes, murder for hire is a serious potential problem, but murders for hire already happen in the world as we have it today so the existence of smart contracts is not going to be an enabler in this respect, hiring someone to kill for you is illegal, whether you use a smart contract or a verbal agreement is not really relevant to that, it's the act that is illegal, not the means of codifying the arrangement.

will_brown 9y ago
Smart contracts are not laws of nature, they are contracts. I totally agree you could come up with a few examples where enforceability would be a practical impossibility, but that's also the case with standard contracts. Just like the Arizona law I cited restricting use of smart contracts for "fire arm tracking", the law could restrict smart contracts in all sorts of ways to protect the public. Examples: -drafters of smart contracts must be licensed and bonded/insured -parties to smart contracts must purchase insurance to coverage sufficient to cover losses in full -criminal liability when marketing materials are inconsistent with the smart contract itself (see: DAO) -just like many contracts, deeds, trusts must/can be filed with the state...the states could require the same of smart contracts Now I understand such laws undermine the purpose/intent of many smart contract opponents, but my point is judges/legislature are not powerless insofar as the laws of nature.
- jacquesm 9y ago
  > Smart contracts are not laws of nature, they are contracts. No, they are software. And the participants to such a contract have agreed that the execution of that software is the entirety of their transaction. If one of the parties changes their mind after the fact they will have to convince a judge first that even though they initially agreed that the execution of the contract was the entirety of the agreement that now this is no longer the case and that what they said was un-ambiguous before is now ambiguous and needs overriding. So now you have a fairly complex situation: - you will have to convince the judge that you entered into that contract and now wish to back out of the defining clause on something that is not classed as 'regret' (which is never a reason to annul a contract) - you will have to find a way to communicate the judge what relief you feel will compensate you at a level that the judge will be able to enforce (this could be very difficult) - and on top of that you will have all the usual issues you have to deal with in a lawsuit possibly complicated by your counterparty being anonymous and/or in an entirely different jurisdiction States don't really matter here, smart contracts are software and are global, that changes their nature in a material way which will make it hard (possibly impossible) for a judge to enforce them one way or the other.

ricksharp 9y ago

Wow, that's the best definition I have heard for Smart Contract (and maybe for Block Chain). I never thought a legal definition would be clearer than every "common" definition I have read. It's like the author of every blog post I've seen titled "What is Ethereum?" has no idea what title they used. I guess that just shows how hype makes it hard to get to the truth.

jacquesm 9y ago
But it is only a local definition. Some other legislative body might make a different one.
throwawayjava 9y ago
Agreed. For all the hate that lawyers and judges receive, they are as good as mathematicians at coming up with (or at least recognizing and choosing) concise and simple definitions.