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But that is the premise of smart contracts. Sure, it doesn't excuse you from the law if your contract is to pay someone to shoot someone, but it's supposed to b

by SamBam 4y ago

But that is the premise of smart contracts. Sure, it doesn't excuse you from the law if your contract is to pay someone to shoot someone, but it's supposed to be the final word on the actual financial transactions that happen within the contract. Plenty of crypto hypers say the same. E.g. from a quick search of "Smart Contract advantages," the very first article, by a law firm: > Guaranteed Outcomes: Potentially the most attractive feature, smart contracts could offer a way to substantially reduce or completely eliminate the need for litigation and courts. This is because when parties commit to using self-executing contracts, they bind themselves to the rules and determinations of the underlying code, rather than exposing themselves to interpretations med by parties outside of the contractual relationship. https://www.newburnlaw.com/benefits-of-smart-contracts https://www.newburnlaw.com/benefits-of-smart-contracts

Ataraxic 4y ago
That may be the premise, but has that actually be held up and recognized as such in courts in major countries? Like are there precedents regarding this? At that point it's no longer a premise (for those particular countries), but until then it's just a supposition. I think courts are wary to wade deeply into a new financial system like this but at the same time I find it hard to believe that the judiciary and the legislature would rule (in the long run) that they have no ability to "make things right". If crypto grows as as many people suggest and you have some significant percentage of the country that has savings or investments tied to these smart contracts, if there is a loophole like in this case, you'd have lots of people writing their local or national representative about this. I find it hard to believe that politicians would tell the people they represent "tough luck code is law".
- nomel 4y ago
  > be held up and recognized as such in courts in major countries? Only having a slight understanding of crypto, if local courts are required, what's the point of crypto? Why not use the existing financial systems, where all of this is built in?
  - knorker 4y ago
    The article even hints at this: > [a crypto bro] criticized the team for turning to a centralized institution like the courts for help But that's exactly the flaw of smart contracts, and why its promises will never work. The hard part of contracts was never execution. The hard part was always conflict resolution and abidance by fair rules (i.e. "laws"). The hard part is what creates the overhead. Smart contracts never solved the hard part. They remove the solution to the hard part, claiming the hard part is not needed at all. But the problems these solutions solve are the hard part. Pretending they don't exist is not "solving" anything. There are so many examples of this. A minor can't enter into a contract. Severely mentally disabled can't either. Someone with a gun to their head can't either. It doesn't matter if they enter into a million dollar contract. That contract is invalid. This is not "waste". This is the hard parts.
    - setr 4y ago
      Eventually there will be smart contracts with assigned arbitrators capable of undoing dependent smart contract transactions, with the right to execute granted by a separate smart contract, which is controlled by a vote to be taken by a randomly selected set of peers in the community, who must first watch in total a video of the aggrieved and offending parties position their argument. And arbitration contracts that can arbitrate the arbitration contracts, and so on. And perhaps a smart contract to allow the amendment of existing contract, by vote of a group of wallets who’ve been elected by another smart contract, who’ve been elected by another smart contract with a larger pool of voters, and so on, until all stakeholders in the contract have had the chance to cast a vote, whose duration as a voter is limited to a 2-4 year term, before requiring another voting round.
      - knorker 4y ago
        Maybe. But you still need an override from real courts, when the contracts fail. That's what courts are for. When someone finds an exploit in the smart contract there must be a "no that's clearly not what anyone meant. Nobody actually wanted all the money in the world to go to Hacker McHackerface". If your assumption is that one of these contract layers is "perfect", then it's not realistic.
sushid 4y ago
Smart contracts allow for guaranteed outcomes. Some commentary added by a random law firm does not mean that guaranteed outcomes == no need for litigation and courts. Just think of non-smart contract parallels. If a bank had an ATM, the premise is that this ATM will execute a series of commands and allow you to withdraw/deposit/transfer funds. If a nefarious back actor found a series of user input that allowed them to withdraw millions of extra dollars, do you believe that the ATM provider will have no legal recourse? What about electronic slot machines?
- fao_ 4y ago
  > Some commentary added by a random law firm does not mean that guaranteed outcomes == no need for litigation and courts. But it would appear that you expect us to believe that some commentary added by a random hacker news poster means the opposite?
  - sushid 4y ago
    I'm not extrapolating on the premise adding my own commentary. The parent commenter asserts an axiom (that we all purported agree with) and then links an observation to said axiom. I'm merely stating that the observation is not part of said axiom.
- cellis 4y ago
  A true non-smart parallel is this. You and I agree on a sporting event between humans. Because I want to construct a fantasy, let's just say it's a three-point basketball contest between adolescents (under 13). The observer will pay $100 dollars per blocked shot, and earn $1 per 3 point play made. All the games are played 1v1. To the untrained basketball player participants, this may seem to be a fair game. After all, it's quite rare in a real basketball game to see a 3 point shot blocked. So they sign the contract, fully agreeing to pay $100 per blocked shot and earn $1 per made 3 pointer. To game this as a participant, I go to the ends of the earth ( I hear Sudan and the Netherlands are both nice this time of year ), and find a 6'8 ,215 lb boy and recruit him to play for me. He proceeds to block every single shot in every contest, winning hundreds of thousands of dollars and bankrupting the organizers. Just to further weight this, I also hire an opposing player who is only 4'3 to shoot as many 3 points as possible as quickly as possible. Now, they signed the contract and agreed to it. They didn't have a clause for height, or any sort of caps, and now they have unlimited downside. How would the legal system handle this? Do you think they would release the participants liability? Perhaps, but not likely if they didn't sign the contract under duress. They fully agreed and had consideration ( the $1 per 3 point made ). It's a contrived example, but it's useful to show that technicalities can be exploited in real world contracts just the same as smart contracts.
jallen_dot_dev 4y ago
> it's supposed to be the final word on the actual financial transactions that happen within the contract. The court doesn't care how crypto idealists think the world should work.

by SamBam 4y ago

Ataraxic 4y ago

That may be the premise, but has that actually be held up and recognized as such in courts in major countries? Like are there precedents regarding this? At that point it's no longer a premise (for those particular countries), but until then it's just a supposition. I think courts are wary to wade deeply into a new financial system like this but at the same time I find it hard to believe that the judiciary and the legislature would rule (in the long run) that they have no ability to "make things right". If crypto grows as as many people suggest and you have some significant percentage of the country that has savings or investments tied to these smart contracts, if there is a loophole like in this case, you'd have lots of people writing their local or national representative about this. I find it hard to believe that politicians would tell the people they represent "tough luck code is law".

nomel 4y ago
> be held up and recognized as such in courts in major countries? Only having a slight understanding of crypto, if local courts are required, what's the point of crypto? Why not use the existing financial systems, where all of this is built in?
- knorker 4y ago
  The article even hints at this: > [a crypto bro] criticized the team for turning to a centralized institution like the courts for help But that's exactly the flaw of smart contracts, and why its promises will never work. The hard part of contracts was never execution. The hard part was always conflict resolution and abidance by fair rules (i.e. "laws"). The hard part is what creates the overhead. Smart contracts never solved the hard part. They remove the solution to the hard part, claiming the hard part is not needed at all. But the problems these solutions solve are the hard part. Pretending they don't exist is not "solving" anything. There are so many examples of this. A minor can't enter into a contract. Severely mentally disabled can't either. Someone with a gun to their head can't either. It doesn't matter if they enter into a million dollar contract. That contract is invalid. This is not "waste". This is the hard parts.
  - setr 4y ago
    Eventually there will be smart contracts with assigned arbitrators capable of undoing dependent smart contract transactions, with the right to execute granted by a separate smart contract, which is controlled by a vote to be taken by a randomly selected set of peers in the community, who must first watch in total a video of the aggrieved and offending parties position their argument. And arbitration contracts that can arbitrate the arbitration contracts, and so on. And perhaps a smart contract to allow the amendment of existing contract, by vote of a group of wallets who’ve been elected by another smart contract, who’ve been elected by another smart contract with a larger pool of voters, and so on, until all stakeholders in the contract have had the chance to cast a vote, whose duration as a voter is limited to a 2-4 year term, before requiring another voting round.
    - knorker 4y ago
      Maybe. But you still need an override from real courts, when the contracts fail. That's what courts are for. When someone finds an exploit in the smart contract there must be a "no that's clearly not what anyone meant. Nobody actually wanted all the money in the world to go to Hacker McHackerface". If your assumption is that one of these contract layers is "perfect", then it's not realistic.

sushid 4y ago

Smart contracts allow for guaranteed outcomes. Some commentary added by a random law firm does not mean that guaranteed outcomes == no need for litigation and courts. Just think of non-smart contract parallels. If a bank had an ATM, the premise is that this ATM will execute a series of commands and allow you to withdraw/deposit/transfer funds. If a nefarious back actor found a series of user input that allowed them to withdraw millions of extra dollars, do you believe that the ATM provider will have no legal recourse? What about electronic slot machines?

fao_ 4y ago
> Some commentary added by a random law firm does not mean that guaranteed outcomes == no need for litigation and courts. But it would appear that you expect us to believe that some commentary added by a random hacker news poster means the opposite?
- sushid 4y ago
  I'm not extrapolating on the premise adding my own commentary. The parent commenter asserts an axiom (that we all purported agree with) and then links an observation to said axiom. I'm merely stating that the observation is not part of said axiom.
cellis 4y ago
A true non-smart parallel is this. You and I agree on a sporting event between humans. Because I want to construct a fantasy, let's just say it's a three-point basketball contest between adolescents (under 13). The observer will pay $100 dollars per blocked shot, and earn $1 per 3 point play made. All the games are played 1v1. To the untrained basketball player participants, this may seem to be a fair game. After all, it's quite rare in a real basketball game to see a 3 point shot blocked. So they sign the contract, fully agreeing to pay $100 per blocked shot and earn $1 per made 3 pointer. To game this as a participant, I go to the ends of the earth ( I hear Sudan and the Netherlands are both nice this time of year ), and find a 6'8 ,215 lb boy and recruit him to play for me. He proceeds to block every single shot in every contest, winning hundreds of thousands of dollars and bankrupting the organizers. Just to further weight this, I also hire an opposing player who is only 4'3 to shoot as many 3 points as possible as quickly as possible. Now, they signed the contract and agreed to it. They didn't have a clause for height, or any sort of caps, and now they have unlimited downside. How would the legal system handle this? Do you think they would release the participants liability? Perhaps, but not likely if they didn't sign the contract under duress. They fully agreed and had consideration ( the $1 per 3 point made ). It's a contrived example, but it's useful to show that technicalities can be exploited in real world contracts just the same as smart contracts.

jallen_dot_dev 4y ago

> it's supposed to be the final word on the actual financial transactions that happen within the contract. The court doesn't care how crypto idealists think the world should work.