4 ms·

As yodon explained, those benefits are handled just as well by ordinary contracts. I've still never got a straight answer from anyone about what smart contracts

• darawk 8y ago
  See my edited response to yodon. I'll also add, that they free up innovation in a valuable way. Take Augur, for example. If you're not familiar, Augur is a decentralized prediction market. In order for a non-crypto startup to create something like a prediction market, they'd need to develop serious banking relationships with banks. The banks could simply refuse to work with them, charge them exorbitant fees, and otherwise encumber the process. However, since Augur is built on the Ethereum network, they didn't need to ask anyone's permission, and they don't ever need to have custody of anyone's funds. This is an example of 'permissionless innovation', to use the buzzword of the day. Permissionless innovation is understood to be one of the most important drivers of economic dynamism, and right now any sort of application that touches the financial sector is heavily burdened by the fact that our financial system is predicated on trust. Smart contracts solve that problem. This is a very subtle point, but it is extremely significant, in my opinion.