Stellar Smart Contracts

Great to see smart contract technology unfolding before our eyes.

Computers are not enforcing law, I think this is just a misunderstanding on how blockchain systems work. They rely on consensus of majority of nodes, that are operated by humans. So in effect software written by small team of people is running on nodes operated by people. Ultimately the entire system is controlled by people, as DAO "hack" clearly shows.

From a legal perspective, this is very interesting. The concept of escrow has existed for centuries I suppose. It needs three parties, A (origin), B (escrow) and C (destination). An escrow is only needed, because A and C don't trust themselves enough. Trust is a basic necessity in any contract and providing trust is a extremely valuable service.

In (Austrian) civil law, there is something called "acquisition in good faith", which allows a third person under certain circumstances to lawfully acquire full and unrestrained ownership of a good from someone who does not have the rights to transfer full and unrestrained ownership of said good.

Example: A wants to sell a laptop to C, but doesn't trust him until he has fully paid the price. They agree to use an escrow agent B. A gives B the laptop and C gives B the money/price. Now what happens if B doesn't acts in bad faith and decides to sell the laptop to the third party T? Well, if T isn't colluding or doesn't have to suspect that B is acting in bad faith, he (under certain conditions, that are most likely met in this case) can acquire full and unrestrained lawful ownership of that laptop. A is only left with claims on account of unjust enrichment against B, but has zero chance of getting his laptop back if T refuses to give it back. In that case it may not be problematic, because A only wanted the money, although he now has to take B to court and B maybe insolvent and so forth. The problem is more poignant if the laptop wasn't a laptop, but something very unique that has no equivalent monetary worth.

And here smart contracts help: they make it impossible to transfer certain goods before certain conditions have been met. The ensure trust. That's why I believe this technology is very valuable.

tl;dr: smart contracts are very valuable, because the ensure trust.

One thing I've found impenetrable about Stellar is the use of the XDR data format. I've never encountered this before and it's been a painful step in starting to build on their platform.

Are their any simple, introductory texts on it? A lot of stuff is from Stellar themselves.

I'm sure there are good reasons for using it, the rest of the platform looks simple to understand and well designed.

I find it incredibly naive.

The blockchain cannot enforce properly where external, real-world events are involved, and the hard part of contract law is not figuring out when to transfer money. It's figuring out when things aren't going as intended, it's figuring out when conditions might be unlawful, or when they just shouldn't be applicable in a given situation.

"Code as law" is very wide of the mark.