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I wouldn't write this off so quickly. The analog is Visa. What would ordinarily be a huge lawsuit is settled by a private commercial arbitration process--namel
by eldavido 8y ago
I wouldn't write this off so quickly.
The analog is Visa. What would ordinarily be a huge lawsuit is settled by a private commercial arbitration process--namely, a chargeback--in case of dispute.
Courts are tremendously expensive and burdensome. There is real economic value created when someone figures out how to move what would otherwise have to go to court, to a separate arbitration process that's perceived as "fair" by everyone involved. I'm not saying that's the right solution for everyone or everything, only that courts should be a last, not first, resort, in case of dispute.
- CPLX 8y agoRight so it's done by people, following a set of policies, all of which ultimately are subordinate to written laws. So like what's the alternative you're suggesting?
- darawk 8y agoSmart contracts enable this mechanism to be pre-agreed upon and have the authority automatically and securely deferred to the pre-arranged arbiter. This improves transparency, reduces transaction costs, and starts the process of commoditizing oracles/arbitration.
- CPLX 8y agoSo instead of a lawyer or arbitrator we get another kind of arbitrator, or an "oracle" which is at root is a human making decisions and putting them into a digital system of some sort. Both of which, like every other extant thing, are subject to review by the courts if their actions make people sufficiently unhappy. And, though now it's confusing, opaque, and unreliable, this system will be cheaper and more transparent because...
- darawk 8y agoBecause it limits the scope of the arbiters responsibilities and capabilities, and precisely specifies their purpose.
- yodon 8y agoThose benefits you're describing are the result of a writing a contract, not of embodying the contract in a digital construct [edited for clarity]
- darawk 8y agoSure. What is your point? EDIT: I guess i'll respond to your edit with another edit. I understand your point, that you can say the same things using a traditional contract, but they don't have the same force. For example, the smart contract can automate and execute the disbursal of funds based on the attestation of some pre-defined oracle. While it's true that this oracle is not decentralized, it is now isolated and scoped. It's role is proscribed to solely this - attestation, and everything else is actuated around that oracle, in a secure and trustless way. I believe that the ability to circumscribe and scope responsibilities in a computational way has valuable benefits, insofar as it commoditizes and modularizes the processes involved. I think of it like a shipping container. Shipping containers commoditize and modularize shipping. Smart contracts commoditize and modularize adjudication.
- cultus 8y agoSo what does the smart contract bring that the regular written contract doesn't?
- ceejayoz 8y ago> The analog is Visa. What would ordinarily be a huge lawsuit is settled by a private commercial arbitration process--namely, a chargeback--in case of dispute. Which remains a process with human-based wiggle room.
- eldavido 8y agoYes. And that is a feature in my view. You should read some of Larry Lessig's work on this topic. If every law was enforced strictly to the letter, the world would be a very different place than it is now. You would get a ticket for going 0.1 mph over the speed limit. You couldn't spend $1 over your credit limit on your card. Your landlord would penalize you for being 1 day late. Every cancellation policy at every hotel would always be rigidly enforced. The point is lowering the cost in the common case while still providing recourse in exceptional circumstances. That, in my mind, is still a huge net positive.
- emaercklein 8y agoVisa is a payment network, not an issuer (like Discover or AMEX). They don't issue credit cards to consumers, they just act as the underlying technology in the five-party model connecting merchants to consumers and their banks and the merchant's bank. Chargebacks are disputed with the issuing bank, not Visa...
- eldavido 8y agoI know this. But Visa sets the rules of the game. They make the rules, everyone else participates. Visa isn't really a technology company. That's how they started, but these days, I think of them as more of a "facilitation platform" responsible for getting everyone into one legally sound network and defining common standards for things, everything from data interchange to how long customers have to request chargebacks, how long banks have to respond, what are valid reasons for revoking an authorization, etc.
- root_axis 8y agoMy point is that the courts make the decisions, not the state of a blockchain or any other computer system. Since a blockchain is just like any other computer system with regard to legal capabilities, using it is a net negative because of all the well-known problems of a blockchain system.
- segmondy 8y agoExcept the merchant loses the chargeback disputes the majority of the time. Chargeback is great if you are a consumer and a nightmare if you're a business.