7 ms·

Also, it's important to realize the core reason why people trust the government with these things. It's because the government has the ability to actually _enfo

Also, it's important to realize the core reason why people trust the government with these things. It's because the government has the ability to actually _enforce_ the contracts if required. I mean, having a deed of owning some property on the blockchain is all cool and dandy. Provided that the polity where the property is located recognizes this. Otherwise you're still trespassing.

fnoof 5y ago
The example in the article had a way to enforce contract breaking - the person had to put up collateral until the work was done. There’s problems with that particular mechanism, but in general if contracts can automatically decrease someone’s money, reputation, access etc, they can do enforcement.
- XorNot 5y ago
  No they can't, how could they? How is actionable events in the real world going to be translated without trust to a smart contract except by assessment by a third party?
- soco 5y ago
  So I have to trust the other party they will report in good faith on my delivered work. How is that trust working for Amazon product reviews? Why would be that net of lies any different for smart contracts?
- _fizz_buzz_ 5y ago
  All these schemes always still might need some higher authority in the end e.g. who decides when the work is done? Putting up collateral only ensures that someone has the money, it does not ensure that one actually gets the money. Because defining when "the work" is done, can be really complicated in real life projects. Contracts in real life are complicated. Real life is messy etc.
  - throwaway405769 5y ago
    > who decides when the work is done? This is part of the smart contract, which has to explicitly define the conditions on which the collateral is confiscated. Getting real life data reliably into the blockchain is hard, but there are different approaches to solve this.
    - roberrrrrrt 5y ago
      The “different approaches to solve this” part, if it ever arrives, would be much more revolutionary than the blockchain itself.
      - throwaway405769 5y ago
        Aave has $11 billion deposited on it right now and safety of those funds depend completely on getting accurate price data to trigger liquidations. So you can say that the oracle problem is solved, at least for price data.
        roberrrrrrt 5y ago
        Getting data in isn’t the big issue though, and we’ve had market data streams since forever. I’m talking about the example above, where a smart contract would need some way of knowing when to flip the “Bob has satisfactorily finished community refurbishment” flag. This would require an abundance of interoperable data sources for bizzare things. Where do I subscribe to the count(dogshit_pile_in_the_playground) stream, and who or what is publishing to it in a trust-less manner?
        throwaway405769 5y ago
        Getting all the data in the world into the blockchain and coding smart contracts to infer judgement from it would be too complex and expensive. A more practical approach is to transfer the funds to Bob once he clicks on the checkbox and have some lock-up period, so that Alice has the opportunity to trigger a dispute if she needs to. Then the dispute can be resolved by a private court (composed of humans) that both Alice and Bob agreed on beforehand. See: https://kleros.io https://kleros.io
- jgilias 5y ago
  So, let's say I pay you 200 ETH and get an NFT signifying ownership of a flat in downtown Kinshasa. I fly to Kinshasa, find the key as you have described, start living in the flat. A year later as I come home I find that the key has been changed and someone else has moved in. They present a purchase agreement, as well as a deed. What happens next?
  - gandutraveler 5y ago
    Exactly, the whole web3 blockchain movement seems to assume these contracts are legally binding in real world. For that to happen the same 'untrustworthy' government authority will have to trust the decentralized contracts on internet.
- newswasboring 5y ago
  Do we really think everyone has money for collateral? Small businesses and individual people are already struggling with money, where will they get the collateral?
- immibis 5y ago
  Reminds me of some of the newer blockchains e.g. I think Binance Smart Chain works like this. They don't use PoW or PoS. Instead they run on centralized servers like traditional databases. Only, they run on 10 or 20 or 50 centralized servers run by different people and processing the same input and cross-checking each other. Anybody who has money on the chain can stake it to vote for one of the servers (so I guess it is PoS really). Although anyone can connect to the chain and process input, the N servers with the highest stake-votes are the ones that actually count. Also the server owner has to put up some crazy collateral (currently in the realm of $500,000 I think, this is determined by market mechanisms, it used to be lower) and if they are caught cheating they lose it, a process called "slashing". Even having your server go down can cause you to lose some collateral. Conversely you earn collateral while it is up (like in PoS). So it's really a lot like a traditional database cluster with an enforcement mechanism, and that enforcement mechanism makes all the difference unless your attacker has millions of dollars to waste.
- peoplefromibiza 5y ago
  > the person had to put up collateral until the work was done So only the people with money can participate?
  - michaelt 5y ago
    My new startup will loan you the non-fungible e-medallion you need to operate as a blockchain cab driver, in exchange for just 30% of your fares.
- usrbinbash 5y ago
  >but in general if contracts can automatically decrease someone’s money, reputation, access etc, they can do enforcement. No, they cannot. They can reduce these values, but that by itself doesn't enforce anything in the real world. If the entitiy doesn't care about these values (for example because it was a fake account/identity/whatever) then the only enforcement can come from outside. That's why the word "force" is in "enforcement". States work because, among other things, they ultimately have a monopoly on the application of force.
josaka 5y ago
I think the sweet spot for some blockchain use cases is where contract enforcement doesn't work well. It's really hard to seek redress for diffuse, low-grade breach. A 10 million people with one dollar in damages are less likely to be made whole than 1 person with 10 million in damages. And contract enforcement often fails in insolvency. Try enforcing a how warranty against a builder that's gone bankrupt.
- WorldMaker 5y ago
  > Try enforcing a [home] warranty against a builder that's gone bankrupt. As someone who has been through this exact thing, it sucks, but it is possible in the current court systems. Courts have complicated "Discovery" processes explicitly for this reason: to find out not just the immediate problem (a bankrupt builder or a builder who would be bankrupt by the end of the court case), but the supply lines (what other warranties apply?) and the creditors (where is the bankrupt company's money going?). A human run court is allowed to state "this bankruptcy looks fishy for this reason, and these people are owed damages, and some of the money that moved on already to these creditors is by rights should be paid for damages to these people". It's definitely not fun to be involved in such court proceedings, and it is and likely always be an inefficient human process, but it is a process as a society we've built to be mostly very trustworthy. A jury of peers to decide if damages are warranted in the first place; a human judge with reasoning to say "this shell company is bankrupt, but these other companies can and should pay, maybe with the money they took from this shell company" or "this shell company is bankrupt but some of this still applies to the warranty insurance product they purchased and the insurance provider needs to pay up even though their client is bankrupt". It doesn't always work right/decide in your favor, and it is slow and expensive, but "smart contracts" offer no better and often a lot worse processes. A "smart contract" can't route around a shell company/wallet. A "smart contract" likely can't discover that other warranties may have applied or other insurance products existed (and if it can it's in a programming class all its own and likely a one off you can't expect to exist in general or to work if you need to actually rely on it).

fnoof 5y ago

The example in the article had a way to enforce contract breaking - the person had to put up collateral until the work was done. There’s problems with that particular mechanism, but in general if contracts can automatically decrease someone’s money, reputation, access etc, they can do enforcement.

XorNot 5y ago
No they can't, how could they? How is actionable events in the real world going to be translated without trust to a smart contract except by assessment by a third party?
soco 5y ago
So I have to trust the other party they will report in good faith on my delivered work. How is that trust working for Amazon product reviews? Why would be that net of lies any different for smart contracts?
_fizz_buzz_ 5y ago
All these schemes always still might need some higher authority in the end e.g. who decides when the work is done? Putting up collateral only ensures that someone has the money, it does not ensure that one actually gets the money. Because defining when "the work" is done, can be really complicated in real life projects. Contracts in real life are complicated. Real life is messy etc.
- throwaway405769 5y ago
  > who decides when the work is done? This is part of the smart contract, which has to explicitly define the conditions on which the collateral is confiscated. Getting real life data reliably into the blockchain is hard, but there are different approaches to solve this.
  - roberrrrrrt 5y ago
    The “different approaches to solve this” part, if it ever arrives, would be much more revolutionary than the blockchain itself.
    - throwaway405769 5y ago
      Aave has $11 billion deposited on it right now and safety of those funds depend completely on getting accurate price data to trigger liquidations. So you can say that the oracle problem is solved, at least for price data.
      - roberrrrrrt 5y ago
        Getting data in isn’t the big issue though, and we’ve had market data streams since forever. I’m talking about the example above, where a smart contract would need some way of knowing when to flip the “Bob has satisfactorily finished community refurbishment” flag. This would require an abundance of interoperable data sources for bizzare things. Where do I subscribe to the count(dogshit_pile_in_the_playground) stream, and who or what is publishing to it in a trust-less manner?
        throwaway405769 5y ago
        Getting all the data in the world into the blockchain and coding smart contracts to infer judgement from it would be too complex and expensive. A more practical approach is to transfer the funds to Bob once he clicks on the checkbox and have some lock-up period, so that Alice has the opportunity to trigger a dispute if she needs to. Then the dispute can be resolved by a private court (composed of humans) that both Alice and Bob agreed on beforehand. See: https://kleros.io https://kleros.io
jgilias 5y ago
So, let's say I pay you 200 ETH and get an NFT signifying ownership of a flat in downtown Kinshasa. I fly to Kinshasa, find the key as you have described, start living in the flat. A year later as I come home I find that the key has been changed and someone else has moved in. They present a purchase agreement, as well as a deed. What happens next?
- gandutraveler 5y ago
  Exactly, the whole web3 blockchain movement seems to assume these contracts are legally binding in real world. For that to happen the same 'untrustworthy' government authority will have to trust the decentralized contracts on internet.
newswasboring 5y ago
Do we really think everyone has money for collateral? Small businesses and individual people are already struggling with money, where will they get the collateral?
immibis 5y ago
Reminds me of some of the newer blockchains e.g. I think Binance Smart Chain works like this. They don't use PoW or PoS. Instead they run on centralized servers like traditional databases. Only, they run on 10 or 20 or 50 centralized servers run by different people and processing the same input and cross-checking each other. Anybody who has money on the chain can stake it to vote for one of the servers (so I guess it is PoS really). Although anyone can connect to the chain and process input, the N servers with the highest stake-votes are the ones that actually count. Also the server owner has to put up some crazy collateral (currently in the realm of $500,000 I think, this is determined by market mechanisms, it used to be lower) and if they are caught cheating they lose it, a process called "slashing". Even having your server go down can cause you to lose some collateral. Conversely you earn collateral while it is up (like in PoS). So it's really a lot like a traditional database cluster with an enforcement mechanism, and that enforcement mechanism makes all the difference unless your attacker has millions of dollars to waste.
peoplefromibiza 5y ago
> the person had to put up collateral until the work was done So only the people with money can participate?
- michaelt 5y ago
  My new startup will loan you the non-fungible e-medallion you need to operate as a blockchain cab driver, in exchange for just 30% of your fares.
usrbinbash 5y ago
>but in general if contracts can automatically decrease someone’s money, reputation, access etc, they can do enforcement. No, they cannot. They can reduce these values, but that by itself doesn't enforce anything in the real world. If the entitiy doesn't care about these values (for example because it was a fake account/identity/whatever) then the only enforcement can come from outside. That's why the word "force" is in "enforcement". States work because, among other things, they ultimately have a monopoly on the application of force.

josaka 5y ago

I think the sweet spot for some blockchain use cases is where contract enforcement doesn't work well. It's really hard to seek redress for diffuse, low-grade breach. A 10 million people with one dollar in damages are less likely to be made whole than 1 person with 10 million in damages. And contract enforcement often fails in insolvency. Try enforcing a how warranty against a builder that's gone bankrupt.

WorldMaker 5y ago
> Try enforcing a [home] warranty against a builder that's gone bankrupt. As someone who has been through this exact thing, it sucks, but it is possible in the current court systems. Courts have complicated "Discovery" processes explicitly for this reason: to find out not just the immediate problem (a bankrupt builder or a builder who would be bankrupt by the end of the court case), but the supply lines (what other warranties apply?) and the creditors (where is the bankrupt company's money going?). A human run court is allowed to state "this bankruptcy looks fishy for this reason, and these people are owed damages, and some of the money that moved on already to these creditors is by rights should be paid for damages to these people". It's definitely not fun to be involved in such court proceedings, and it is and likely always be an inefficient human process, but it is a process as a society we've built to be mostly very trustworthy. A jury of peers to decide if damages are warranted in the first place; a human judge with reasoning to say "this shell company is bankrupt, but these other companies can and should pay, maybe with the money they took from this shell company" or "this shell company is bankrupt but some of this still applies to the warranty insurance product they purchased and the insurance provider needs to pay up even though their client is bankrupt". It doesn't always work right/decide in your favor, and it is slow and expensive, but "smart contracts" offer no better and often a lot worse processes. A "smart contract" can't route around a shell company/wallet. A "smart contract" likely can't discover that other warranties may have applied or other insurance products existed (and if it can it's in a programming class all its own and likely a one off you can't expect to exist in general or to work if you need to actually rely on it).