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With smart contracts there is only the code. There is no external trusted documentation that says what the intention of the code is. If the contract allows for

With smart contracts there is only the code. There is no external trusted documentation that says what the intention of the code is. If the contract allows for an action to occur, then that action is permissible. It's the old quote taken to an extreme, "The good news about computers is that they do what you tell them to do. The bad news is that they do what you tell them to do." If there is a 'bug' that allows anybody to empty a smart contract, well it turns out that you were just hosting a complex coding competition with a prize.

kybernetikos 4y ago
> There is no external trusted documentation that says what the intention of the code is. Working out what both parties intended a contract to mean and what it should mean, sometimes in contradiction of what it actually says is exactly what the legal system does. You can't evade the legal system by writing your contract in a different form. Weirdly I think this idea comes from thinking law is code when it isn't.
- myownpetard 4y ago
  A judge is supposed to read the smart contract source code and determine the intent? The parties are frequently anonymous and have never interacted outside of the publication the smart contract to the blockchain and another party interacting with it. There is no basis for determining intent besides the code itself. Are you thinking that the contracts have analogs to legal contracts? Usually (exclusively?) they only mediate transactions and behavior that is contained within the blockchain itself. There isn't an exchanging of assets that exist externally to the blockchain like real estate. Although I think crypto fanatics think that the world will trend that way. Truly programmable money has never existed before. If more of our monetary infrastructure migrates to blockchains it will be interesting to see how current contract law adapts and is applied. If you want to argue with 'code is law' proponent, ask them how they feel about the DAO hack and ensuing hard fork of Ethereum. That was an interesting case where the ETH community as a whole decided that code was not in fact law.
  - dTal 4y ago
    >A judge is supposed to read the smart contract source code and determine the intent? If it's hard for a judge, it's presumably also hard for anyone using the smart contract. >There is no basis for determining intent besides the code itself. I'll bet you any frequently used contract has an associated website. Basically, conducting your business on a blockchain doesn't exempt you from the law. You - the squishy human at the end of the transaction - are not on the blockchain, and neither is the author of any smart contract you might use. As long as the law recognizes blockchain assets as valid consideration in contracts, contract law trumps blockchain law.
    - myownpetard 4y ago
      Does participation in a smart contract imply any kind of legal agreement? You're essentially interacting with an api/bot that's being hosted by whatever blockchain community at large. Anybody can publish anything, and any unrelated parties can interact with it. Here's a thought experiment for you. If I were to publish a public webpage where you entered a routing number into a textbox and money was immediately transferred from my account to the specified account for the purpose of sending money to a friend of mine, but somebody else found the website and entered their routing number and drained my account. Would I have legal recourse? This is essentially the Parity wallet exploit. The API was only slightly more complicated than the example above, initWallet(). It's an interesting paradigm shift. If contracts are automatically enforced, what features of the existing legal system are obsolete? If monetary/financial contracts are completely logically unambiguous in their execution and there is no need to appeal to a designated wielder of physical force to ensure their execution... I think that notion, which sounds unrealistic to me, is what appeals to lot of crypto absolutists. It fails in a lot of the ways that smart contracts currently struggle, how to computationally, and in an unbiased way, relate crypto to the world outside of the blockchain. A good example of this is oracles, which are so flimsy in so many situations. As you said we don't exist on the blockchain, the physical world doesn't exist on the blockchain, so how can we do away with our existing systems for mediating disputes, determining intent etc?
      - kybernetikos 4y ago

kybernetikos 4y ago

> There is no external trusted documentation that says what the intention of the code is. Working out what both parties intended a contract to mean and what it should mean, sometimes in contradiction of what it actually says is exactly what the legal system does. You can't evade the legal system by writing your contract in a different form. Weirdly I think this idea comes from thinking law is code when it isn't.

myownpetard 4y ago
A judge is supposed to read the smart contract source code and determine the intent? The parties are frequently anonymous and have never interacted outside of the publication the smart contract to the blockchain and another party interacting with it. There is no basis for determining intent besides the code itself. Are you thinking that the contracts have analogs to legal contracts? Usually (exclusively?) they only mediate transactions and behavior that is contained within the blockchain itself. There isn't an exchanging of assets that exist externally to the blockchain like real estate. Although I think crypto fanatics think that the world will trend that way. Truly programmable money has never existed before. If more of our monetary infrastructure migrates to blockchains it will be interesting to see how current contract law adapts and is applied. If you want to argue with 'code is law' proponent, ask them how they feel about the DAO hack and ensuing hard fork of Ethereum. That was an interesting case where the ETH community as a whole decided that code was not in fact law.
- dTal 4y ago
  >A judge is supposed to read the smart contract source code and determine the intent? If it's hard for a judge, it's presumably also hard for anyone using the smart contract. >There is no basis for determining intent besides the code itself. I'll bet you any frequently used contract has an associated website. Basically, conducting your business on a blockchain doesn't exempt you from the law. You - the squishy human at the end of the transaction - are not on the blockchain, and neither is the author of any smart contract you might use. As long as the law recognizes blockchain assets as valid consideration in contracts, contract law trumps blockchain law.
  - myownpetard 4y ago
    Does participation in a smart contract imply any kind of legal agreement? You're essentially interacting with an api/bot that's being hosted by whatever blockchain community at large. Anybody can publish anything, and any unrelated parties can interact with it. Here's a thought experiment for you. If I were to publish a public webpage where you entered a routing number into a textbox and money was immediately transferred from my account to the specified account for the purpose of sending money to a friend of mine, but somebody else found the website and entered their routing number and drained my account. Would I have legal recourse? This is essentially the Parity wallet exploit. The API was only slightly more complicated than the example above, initWallet(). It's an interesting paradigm shift. If contracts are automatically enforced, what features of the existing legal system are obsolete? If monetary/financial contracts are completely logically unambiguous in their execution and there is no need to appeal to a designated wielder of physical force to ensure their execution... I think that notion, which sounds unrealistic to me, is what appeals to lot of crypto absolutists. It fails in a lot of the ways that smart contracts currently struggle, how to computationally, and in an unbiased way, relate crypto to the world outside of the blockchain. A good example of this is oracles, which are so flimsy in so many situations. As you said we don't exist on the blockchain, the physical world doesn't exist on the blockchain, so how can we do away with our existing systems for mediating disputes, determining intent etc?
    - kybernetikos 4y ago