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All your arguments has this implicit assumption of a central authority that you trust to do its job: - "SEPA is pan-European credit transfers". Emphasis in

All your arguments has this implicit assumption of a central authority that you trust to do its job: - "SEPA is pan-European credit transfers". Emphasis in "European". Good luck _reliably_ sending money to China or across Atlantic _in_several_days_. Reliable 10s is a dream there. - "Every country already has its native currency." Emphasis on "country". With a central bank that manages the supply. - "All (democratic) countries have courts in place." Again, emphasis on "countries" and "democratic" (which you obviously felt the need to put in). The fundamental technical innovation of cryptocurrencies is permissionless decentralized consensus - you don't need a trusted central authority to execute transfers and contracts. That is (in my opinion) where the fundamental "usefulness" of crypto stems from.

maxerickson 5y ago
Contracts can't enforce themselves.
- quantum_mcts 5y ago
  https://en.wikipedia.org/wiki/Smart_contract https://en.wikipedia.org/wiki/Smart_contract
  - realce 5y ago
    Where in this article does it describe how I get tenants out of my rental when they don't pay into the smart contract? That's what enforcement is, not just some rules in a spreadsheet.
    - WnZ39p0Dgydaz1 5y ago
      Actually, it's some rules in a spreadsheet. You get tenants out of your rental because someone is getting paid to do it - their salary is in some spreadsheet - and then their work is verified by someone else who is also getting paid to do that. These complex systems of incentives are currently managed by humans. You could setup a similar incentive system as smart contracts. If your tenant does not pay, you could get him evicted much fatser and automatically, because another smart contract can pay the enforcer. And the overall fees are subsidized and tradeable. Of course we're far away from doing that and both approaches have pros and cons, but it's arguable that the "human-managed" approach is clearly superior.
      - maxerickson 5y ago
        In your description, you used the word 'enforcer' for the entity that does the important bit. That entity isn't the contract.
        WnZ39p0Dgydaz1 5y ago
        What do you mean by "That entity isn't the contract"? Yes, the enforcer is not (necessarily) part of the contract. But if the right incentive system is in place and there is consensus that physical enforcement should happen - anyone approved could take that job/risk and be the enforcer. With such a system you may not even need a physical enforcer since the risk of not getting the tenant out could be tradeable (like an insurance) and the owner would get his rent even if the tenant cannot be evicted immediately. In case of the tenant, there would be huge negative financial incentives to stay.
        lottin 5y ago
        The point is that such a contract requires a central authority that must be capable of evicting the tenant. A "smart contract" which is just some code running on a computer certainly can't do that.
        WnZ39p0Dgydaz1 5y ago
        Why do you require a central authority? What you require is this: 1. An incentive to evict someone. Money. Someone needs to get paid to actually do the eviction because they are taking on some risk - physical in this case. It doesn't matter how they get paid. A smart contract can do that. 2. "Social/Legal consensus" that performing the physical eviction is the right thing to do. The person performing the eviction should not get punished for it. If the state and breach of contract is transparent on the blockchain this consensus could be achieved. 3. A way to confirm the eviction to pay the evictor.
        ac29 5y ago
    - mindcandy 5y ago
      It would require a larger deposit to act as collateral. Maybe 3-4 months rent. If they stop paying rent, they don’t get the deposit back and you have 3-4 months to call the cops about the trespassers.
lottin 5y ago
How would a smart contract work in the case of, say, a residential tenancy agreement? How does the smart contract know if the terms of the agreement have been met or not? And how would the contract be enforced, for instance, if the tenant fails to pay rent?
- mindcandy 5y ago
  I’m not a smart contract dev, but here’s my understanding. You have three fundamental tools to worth with: money, time and signaling consent. The only way to enforce consequences without lawyers is collateral. So, you could have a contract that requires two months rent as a deposit to start. From there you can have simple rules: if the contract expires, the tenant gets the deposit back. At the end of the contract, the landlord can take up to 1 month’s rent from the deposit to cover damages. If the contract is canceled, the tenant does not get the second month-worth of deposit back. The contract is canceled if the rent is not paid on time or if the landlord + some notary-like third party sign off on cancellation. Etc...
  - smt88 5y ago
    This smart contract has no way of knowing if/what the damages are, whether the rent was paid in cash, or whether a million other legal issues are happening. For example, in most places, tenants may stop paying rent if their heat breaks in the winter and the landlord won't fix it promptly. The central authority will always be human courts. Smart contracts can't observe or record anything except crypto, which makes them useless in 99% of contractual disputes.
    - WnZ39p0Dgydaz1 5y ago
      Yes, you will always need humans to make human judgements but they don't need to be part of a court or central authority. With reputation and consensus incentive systems in place, these judgements can be made by trusted 3rd parties and feed back into the smart contract without the need for a single central authority. The point isn't to get rid of humans or trusted 3rd parties. It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious.

maxerickson 5y ago

Contracts can't enforce themselves.

quantum_mcts 5y ago
https://en.wikipedia.org/wiki/Smart_contract https://en.wikipedia.org/wiki/Smart_contract
- realce 5y ago
  Where in this article does it describe how I get tenants out of my rental when they don't pay into the smart contract? That's what enforcement is, not just some rules in a spreadsheet.
  - WnZ39p0Dgydaz1 5y ago
    Actually, it's some rules in a spreadsheet. You get tenants out of your rental because someone is getting paid to do it - their salary is in some spreadsheet - and then their work is verified by someone else who is also getting paid to do that. These complex systems of incentives are currently managed by humans. You could setup a similar incentive system as smart contracts. If your tenant does not pay, you could get him evicted much fatser and automatically, because another smart contract can pay the enforcer. And the overall fees are subsidized and tradeable. Of course we're far away from doing that and both approaches have pros and cons, but it's arguable that the "human-managed" approach is clearly superior.
    - maxerickson 5y ago
      In your description, you used the word 'enforcer' for the entity that does the important bit. That entity isn't the contract.
      - WnZ39p0Dgydaz1 5y ago
        What do you mean by "That entity isn't the contract"? Yes, the enforcer is not (necessarily) part of the contract. But if the right incentive system is in place and there is consensus that physical enforcement should happen - anyone approved could take that job/risk and be the enforcer. With such a system you may not even need a physical enforcer since the risk of not getting the tenant out could be tradeable (like an insurance) and the owner would get his rent even if the tenant cannot be evicted immediately. In case of the tenant, there would be huge negative financial incentives to stay.
        lottin 5y ago
        The point is that such a contract requires a central authority that must be capable of evicting the tenant. A "smart contract" which is just some code running on a computer certainly can't do that.
        WnZ39p0Dgydaz1 5y ago
        Why do you require a central authority? What you require is this: 1. An incentive to evict someone. Money. Someone needs to get paid to actually do the eviction because they are taking on some risk - physical in this case. It doesn't matter how they get paid. A smart contract can do that. 2. "Social/Legal consensus" that performing the physical eviction is the right thing to do. The person performing the eviction should not get punished for it. If the state and breach of contract is transparent on the blockchain this consensus could be achieved. 3. A way to confirm the eviction to pay the evictor.
        ac29 5y ago
  - mindcandy 5y ago
    It would require a larger deposit to act as collateral. Maybe 3-4 months rent. If they stop paying rent, they don’t get the deposit back and you have 3-4 months to call the cops about the trespassers.

lottin 5y ago

How would a smart contract work in the case of, say, a residential tenancy agreement? How does the smart contract know if the terms of the agreement have been met or not? And how would the contract be enforced, for instance, if the tenant fails to pay rent?

mindcandy 5y ago
I’m not a smart contract dev, but here’s my understanding. You have three fundamental tools to worth with: money, time and signaling consent. The only way to enforce consequences without lawyers is collateral. So, you could have a contract that requires two months rent as a deposit to start. From there you can have simple rules: if the contract expires, the tenant gets the deposit back. At the end of the contract, the landlord can take up to 1 month’s rent from the deposit to cover damages. If the contract is canceled, the tenant does not get the second month-worth of deposit back. The contract is canceled if the rent is not paid on time or if the landlord + some notary-like third party sign off on cancellation. Etc...
- smt88 5y ago
  This smart contract has no way of knowing if/what the damages are, whether the rent was paid in cash, or whether a million other legal issues are happening. For example, in most places, tenants may stop paying rent if their heat breaks in the winter and the landlord won't fix it promptly. The central authority will always be human courts. Smart contracts can't observe or record anything except crypto, which makes them useless in 99% of contractual disputes.
  - WnZ39p0Dgydaz1 5y ago
    Yes, you will always need humans to make human judgements but they don't need to be part of a court or central authority. With reputation and consensus incentive systems in place, these judgements can be made by trusted 3rd parties and feed back into the smart contract without the need for a single central authority. The point isn't to get rid of humans or trusted 3rd parties. It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious.