Simple contracts then are only as scalable, reliable, and secure as the code that runs off the blockchain.
Arguably, that defeats the whole purpose because it is then who controls the code (since it is no longer decentralized), controls the contract.
If I'm reading this right (I'm not 100% sure of that), this is the equivalent almost of not running a blockchain at all (if the idea is taken to its finality).
Storing the who and the what of contracts has never really been the issue, its been the execution and the honoring of the contract that man has not yet solved.
But centralizing the code that runs the contracts, and taking it off the blockchain doesn't sound like the way to do it.
What is supposed to give us the impression the problem of contract execution hasn't been solved?
A huge majority of contracts are never disputed, carried out to completion or ran as a going concern without any issues. Contracts are routinely renegotiated when one or both parties have a change in circumstances, or at specific time intervals. Only a very tiny fraction of contracts are ever disputed, and fewer of those reach the courts.
I don't understand the problem trying to be solved here.
>> I don't understand the problem trying to be solved here.
Lawyers. They want to get rid of the lawyers.
It's a common desire. Like politicians, you want to get rid of them up until the day you actually need one. That day may have come for smart contracts. Does anyone here doubt TheDAO are now seeking legal advice on this matter?
Exactly. If you write a crummy contract but believe it is sound, then set out to convince other people of it soundness, and they sign up and pour their money in, and then the contract leaks, who's responsible? ... well, next minute: lawyers.
We'll first have to invent, and deploy at scale, the immutable person before we can have the perfect contract 100% of the time.
So long as people change, minds are fallible, misunderstandings and disagreements continue to occur, interpretation and intent are going to be fuzzy.
>>its been the execution and the honoring of the contract that man has not yet solved.
I think we've worked it out. Billions of contracts are executed and honoured between flesh-and-blood persons every day. 99.999999% work without issue. A few wind up in courts, but I'd still call that a very good track record.
(Yes I said billions, read up on all the various forms of contracts. Anyone reading this likely enters into and honours a dozen contracts in a typical day.)
> Billions of contracts are executed and honoured between flesh-and-blood persons every day. 99.999999% work without issue.
It's a great point about volume. However a huge number of legal cases + contracts never get started in the first place because of cost. So those would be absent from your success rate.
To put it bluntly there is no point in writing a contract for a $200 dollar job. Countless little guys get screwed over every day because of this. Ultimately they work by handshake deals or through family businesses because working with larger corps is a headache. My father for example had to pay 200 euros for a large firm he worked for to process some paperwork they also invented. That is; a firm that he works for, he has to pay them money, in order to be hired by them in the future. This is probably illegal but this is what happens when you can't risk finding out whether this is a breach of contract. That seems like a failure to me.
That's where I see digital contracts making a real difference. Making the legal system comprehensible and inexpensive for the working poor.
>> ... there is no point in writing a contract for a $200 dollar job.
You don't need to "write" a contract for a contract to be in place. Contracts can exist between people who are illiterate, even those who cannot express themselves. A contract is a state-sanctioned and enforced relationship. The document is just one form of evidence useful in defining that relationship.
There are more types of contracts than written contracts. Even handshake deals can be considered contracts (though you'd need evidence that the agreement happened as well as evidence that all of the other conditions for enforceable contracts apply). Paper contracts exist so that there is a very clear statement of intent, but that's just one kind of contract.
Kickstarter and PayPal surely have large teams working on arbitration, review and fraud that could be delegated back to the involved parties vote with some rules.
And law suits can be very inefficient.
This absolutely could be solved without a block chain.
How can code on a blockchain decide whether an eBay listing was fraudulent without paying humans to make the determination? Unless you have a general AI up your sleeve!
I don't understand how arbitration would work. Say "A" buys something from "B". Later "A" complains what was shipped isn't what he ordered. How do you solve this with a blockchain and votes?
Arguably, that defeats the whole purpose because it is then who controls the code (since it is no longer decentralized), controls the contract.
If I'm reading this right (I'm not 100% sure of that), this is the equivalent almost of not running a blockchain at all (if the idea is taken to its finality).
Storing the who and the what of contracts has never really been the issue, its been the execution and the honoring of the contract that man has not yet solved.
But centralizing the code that runs the contracts, and taking it off the blockchain doesn't sound like the way to do it.