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> Housing price data is publicly-available and pretty easy to verify at no cost. Anyone considering investing in real estate presumably has access to this info

> Housing price data is publicly-available and pretty easy to verify at no cost. Anyone considering investing in real estate presumably has access to this info already. That doesn't answer the question of how I know I can trust the computer that feeds housing price data into the contract. What if it cuts the prices by 10% before feeding them into the contract? > That's a risk with any type of transaction, but easy to verify with a good lawyer You have no way to ensure that what the lawyer verifies is what the contract will release upon default. > Token holders would only receive an ownership stake if the buyer defaults That doesn't answer the question of how the ownership stake is enforced. If the default occurs, the token holders will have to go to court to figure it all out which eliminates the usefulness of the contract. > There already is precedent for homes to have multiple owners. Depending upon the desired number of lenders/investors, a shell company may need to be created, but again that is relatively straightforward. If my ownership stake is codified through the existing legal system what use is the smart contract? It doesn't matter what the smart contract does if I've already established myself as a partial owner via a shell corporation.

jasonlaramburu 9y ago
I think a lot of your questions are more related to how eth smart contracts work. Apologies if I'm misunderstanding. It's easy to verify that the deployed code of an eth smart contract matches the open source code using the Bytecode of the deployed contract. Etherscan offers contract verification, as do many other sources. >That doesn't answer the question of how I know I can trust the computer that feeds housing price data into the contract. What if it cuts the prices by 10% before feeding them into the contract? You can read the state of a contract for free, so you would be able to see whatever the 'price' was at any given moment. It would obviously be on you to do your DD and confirm that the price is accurate. >You have no way to ensure that what the lawyer verifies is what the contract will release upon default. Yes you do, see first comment above. >If the default occurs, the token holders will have to go to court to figure it all out. Not all defaults will necessarily lead to litigation. The parties would only need to go to court if the owner did not abide by the terms of the contract. In any traditional foreclosure lots of money and time is spent on legal proceedings. >If my ownership stake is codified through the existing legal system what use is the smart contract? You would only need to use the existing legal system in the event of default or breach, which would hopefully be rare. The contract eliminates middlemen. The token also gives investors/lenders significantly more liquidity, which is desirable.
- root_axis 9y ago
  > It would obviously be on you to do your DD and confirm that the price is accurate. Due diligence is irrelevant. The point is that a smart contract cannot run a scraper, it must outsource that work to another computer living outside the blockchain; that computer is a blackbox thats behavior could change at any time. > It's easy to verify that the deployed code of an eth smart contract matches the open source code using the Bytecode of the deployed contract The code is not the issue. If all documents are available from the beginning then the smart contract is not doing anything useful. A smart contract cannot execute a deed automatically so it serves no purpose that could not otherwise be achieved using centralized software systems. > Not all defaults will necessarily lead to litigation. The parties would only need to go to court if the owner did not abide by the terms of the contract The entire purpose of a contract is that people very often fail to meet the terms of the agreement. If you're relying on the legal system to adjudicate smart contract disputes then the smart contract is literally no different from a traditional legal contract except that it is written in unnecessarily inefficient blockchain code instead of legalese. > The token also gives investors/lenders significantly more liquidity The tokens provide no liquidity because the legal system does not recognize them as real, you might as well print out PGP signed IOUs on index cards for all those tokens are worth.
  - jasonlaramburu 9y ago
    >a smart contract cannot run a scraper Sure it can. It would be expensive and slow, but certainly possible. Yes, an off-chain scraper could change its behavior. I don’t know why it would be in the interest of the company offering this service to do that, but sure. As I said before, you could view the output of this scraper anytime from within the contract itself (either through the company’s front end, or a 3rd party blockchain browser). If it looked lower than the publicly-available average, you would know there was a problem. >a smart contract cannot execute a deed automatically Sure it can >serves no purpose that could not otherwise be achieved using centralized software systems You argue against yourself here. Your issue with the off-chain scraper is one of trust- ‘how do I know it won’t change its behavior?’ I ask you the same question: how do I know a centralized server will not change my contract, or delete it? With a distributed smart contract, you can be sure that if you audit the deployed code, it cannot be changed without your knowledge. >no different from a traditional legal contract The contract is really more of a trustless escrow system. It holds the legal contract for all parties securely, and ensures that no single bad-actor can change it. >The tokens provide no liquidity You don’t know that. If enough projects got funded this way-big if- lenders could buy, sell trade their positions.

jasonlaramburu 9y ago

I think a lot of your questions are more related to how eth smart contracts work. Apologies if I'm misunderstanding. It's easy to verify that the deployed code of an eth smart contract matches the open source code using the Bytecode of the deployed contract. Etherscan offers contract verification, as do many other sources. >That doesn't answer the question of how I know I can trust the computer that feeds housing price data into the contract. What if it cuts the prices by 10% before feeding them into the contract? You can read the state of a contract for free, so you would be able to see whatever the 'price' was at any given moment. It would obviously be on you to do your DD and confirm that the price is accurate. >You have no way to ensure that what the lawyer verifies is what the contract will release upon default. Yes you do, see first comment above. >If the default occurs, the token holders will have to go to court to figure it all out. Not all defaults will necessarily lead to litigation. The parties would only need to go to court if the owner did not abide by the terms of the contract. In any traditional foreclosure lots of money and time is spent on legal proceedings. >If my ownership stake is codified through the existing legal system what use is the smart contract? You would only need to use the existing legal system in the event of default or breach, which would hopefully be rare. The contract eliminates middlemen. The token also gives investors/lenders significantly more liquidity, which is desirable.

root_axis 9y ago
> It would obviously be on you to do your DD and confirm that the price is accurate. Due diligence is irrelevant. The point is that a smart contract cannot run a scraper, it must outsource that work to another computer living outside the blockchain; that computer is a blackbox thats behavior could change at any time. > It's easy to verify that the deployed code of an eth smart contract matches the open source code using the Bytecode of the deployed contract The code is not the issue. If all documents are available from the beginning then the smart contract is not doing anything useful. A smart contract cannot execute a deed automatically so it serves no purpose that could not otherwise be achieved using centralized software systems. > Not all defaults will necessarily lead to litigation. The parties would only need to go to court if the owner did not abide by the terms of the contract The entire purpose of a contract is that people very often fail to meet the terms of the agreement. If you're relying on the legal system to adjudicate smart contract disputes then the smart contract is literally no different from a traditional legal contract except that it is written in unnecessarily inefficient blockchain code instead of legalese. > The token also gives investors/lenders significantly more liquidity The tokens provide no liquidity because the legal system does not recognize them as real, you might as well print out PGP signed IOUs on index cards for all those tokens are worth.
- jasonlaramburu 9y ago
  >a smart contract cannot run a scraper Sure it can. It would be expensive and slow, but certainly possible. Yes, an off-chain scraper could change its behavior. I don’t know why it would be in the interest of the company offering this service to do that, but sure. As I said before, you could view the output of this scraper anytime from within the contract itself (either through the company’s front end, or a 3rd party blockchain browser). If it looked lower than the publicly-available average, you would know there was a problem. >a smart contract cannot execute a deed automatically Sure it can >serves no purpose that could not otherwise be achieved using centralized software systems You argue against yourself here. Your issue with the off-chain scraper is one of trust- ‘how do I know it won’t change its behavior?’ I ask you the same question: how do I know a centralized server will not change my contract, or delete it? With a distributed smart contract, you can be sure that if you audit the deployed code, it cannot be changed without your knowledge. >no different from a traditional legal contract The contract is really more of a trustless escrow system. It holds the legal contract for all parties securely, and ensures that no single bad-actor can change it. >The tokens provide no liquidity You don’t know that. If enough projects got funded this way-big if- lenders could buy, sell trade their positions.