5 ms·

If NFTs only become useful when tied to a regular legal contract, why not just use a regular legal contract?

TeMPOraL 1y ago
Because despite some popular opinions to the contrary, the blockchain/crypto part isn't replacing the legal layer; it's just implementing a way of tracking things that's less reliant on trust than the usual way of doing it.
- immibis 1y ago
  Apparently it's not uncommon that when a debt collector buys a spreadsheet of unpaid debt, they can't actually prove in court that the debtor actually owes them the debt. You'd think some form of cryptocurrency technology would improve this - the legal contract would say you'd pay to a certain smart contract address until the smart contract says you paid enough (the legal contract would also have to specify how this is calculated as it would take precedence over the smart contract in case of a dispute); the smart contract would implement an NFT where the holder of the NFT receives the debt payments. Alternatively, it implements an NFT and holds a payee address (physical address, business name) and whoever has the NFT can update the payee address and whoever that's set to is the current creditor. Of course, we probably don't want the dystopic parts of society to get more reliable, but the fact is the tech would probably make them so.
  - TeMPOraL 1y ago
    > Of course, we probably don't want the dystopic parts of society to get more reliable, but the fact is the tech would probably make them so. I strongly agree, and thank you for spelling it out. It's a point often lost in discussions of both tech and economics, that we need some slack in the system. That's where happiness, love, friendship, compassion, charity, forgiveness, imagination, and all other things good, nice and human, live. Too much efficiency just grinds people to dust. (That, and creates brittle systems that breaks the first moment reality asserts itself.) > Apparently it's not uncommon that when a debt collector buys a spreadsheet of unpaid debt, they can't actually prove in court that the debtor actually owes them the debt. You'd think some form of cryptocurrency technology would improve this At a glance, I think your idea would work. I'm just curious about corner cases alone, and how often they'd happen. For example, in some cases, I imagine it would actually reveal there is no proof because the debt is bogus. My impression is, no one in the chain is really incentivized to verify whether the debt is legitimate. Creditors outsource that in bulk to collection agencies, agencies might find it easier to try and collect anyway than proactively validate every entry in the spreadsheet, and plenty of debtors will contest real debts anyway. For the first two, the name of the game is minimizing costs; not sure if adding crypto to the mix would help, or just make the process more complicated and expensive. I also wonder what would happen if, for some reason, a smart contract/NFT was established around a bogus entry. How much harder would it be for the debtor to prove that they don't actually owe the money in question?
    - immibis 1y ago
      The debt collector would run through the list of proofs when buying the debt without the proof. Automatically. The spreadsheet would, as well as name and address or whatever it already has, list a smart contract ID and a signature proving ownership of the private key currently registered to it. Transfer of debt could even be an atomic blockchain transaction, moving the debt and the money in the same transaction. Some would probably buy proofless unpaid debt, but it would be almost worthless. > How much harder would it be for the debtor to prove that they don't actually owe the money in question? I refer you to the aforementioned dystopia. Even today, if your credit card is used in a transaction involving the physical card and your PIN, it's presumed you agreed to pay.

Because despite some popular opinions to the contrary, the blockchain/crypto part isn't replacing the legal layer; it's just implementing a way of tracking things that's less reliant on trust than the usual way of doing it.

immibis 1y ago
Apparently it's not uncommon that when a debt collector buys a spreadsheet of unpaid debt, they can't actually prove in court that the debtor actually owes them the debt. You'd think some form of cryptocurrency technology would improve this - the legal contract would say you'd pay to a certain smart contract address until the smart contract says you paid enough (the legal contract would also have to specify how this is calculated as it would take precedence over the smart contract in case of a dispute); the smart contract would implement an NFT where the holder of the NFT receives the debt payments. Alternatively, it implements an NFT and holds a payee address (physical address, business name) and whoever has the NFT can update the payee address and whoever that's set to is the current creditor. Of course, we probably don't want the dystopic parts of society to get more reliable, but the fact is the tech would probably make them so.
- TeMPOraL 1y ago
  > Of course, we probably don't want the dystopic parts of society to get more reliable, but the fact is the tech would probably make them so. I strongly agree, and thank you for spelling it out. It's a point often lost in discussions of both tech and economics, that we need some slack in the system. That's where happiness, love, friendship, compassion, charity, forgiveness, imagination, and all other things good, nice and human, live. Too much efficiency just grinds people to dust. (That, and creates brittle systems that breaks the first moment reality asserts itself.) > Apparently it's not uncommon that when a debt collector buys a spreadsheet of unpaid debt, they can't actually prove in court that the debtor actually owes them the debt. You'd think some form of cryptocurrency technology would improve this At a glance, I think your idea would work. I'm just curious about corner cases alone, and how often they'd happen. For example, in some cases, I imagine it would actually reveal there is no proof because the debt is bogus. My impression is, no one in the chain is really incentivized to verify whether the debt is legitimate. Creditors outsource that in bulk to collection agencies, agencies might find it easier to try and collect anyway than proactively validate every entry in the spreadsheet, and plenty of debtors will contest real debts anyway. For the first two, the name of the game is minimizing costs; not sure if adding crypto to the mix would help, or just make the process more complicated and expensive. I also wonder what would happen if, for some reason, a smart contract/NFT was established around a bogus entry. How much harder would it be for the debtor to prove that they don't actually owe the money in question?
  - immibis 1y ago
    The debt collector would run through the list of proofs when buying the debt without the proof. Automatically. The spreadsheet would, as well as name and address or whatever it already has, list a smart contract ID and a signature proving ownership of the private key currently registered to it. Transfer of debt could even be an atomic blockchain transaction, moving the debt and the money in the same transaction. Some would probably buy proofless unpaid debt, but it would be almost worthless. > How much harder would it be for the debtor to prove that they don't actually owe the money in question? I refer you to the aforementioned dystopia. Even today, if your credit card is used in a transaction involving the physical card and your PIN, it's presumed you agreed to pay.