Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

news.ycombinator.com

Post reply on HN
Print view View original

81–90 of 111 posts

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#81

Post by acdha »

mindcandy wrote: post #61
acdha wrote: post #57

Earlier quoted context omitted.

Who writes those contracts? Who debugs them? Who settles disputes if one the parties feels that the other isn’t honoring them? This replaces attorneys by creating attorney-programmers who charge more and have less recourse when someone makes a mistake.

The assumption that smart contracts are going to cost more than attorneys is presumptive. For the common cases, open source contracts will be inevitable. This will give the world’s poorest options that were never available before.

Kind of like the way standard contracts have been available for many common needs for many decades? Remember, there’s no reason why you can’t have open source contracts now - the challenge is that knowledge of the law is not trivial and liability is a very real concern (want to risk being charged with practicing law without a license?). Adding a separate source of problems might distract from that but it doesn’t make the hard problem go away.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#82

Post by dmitriid »

mindcandy wrote: post #68
dmitriid wrote: post #64

Earlier quoted context omitted.

So, literally not better than an existing contract, but with the added complexity of coding it and having both the landlord and the tenant be programmers versed in esoteric languages to verify it.

That’s a super-bad-faith argument. Did you personally write the legal contract for the last place you were a tenant of without any involvement from a lawyer? No. Your landlord might have hired a lawyer. Mine used an off-the-shelf legal contract. For common situations like rent, open-source contracts are inevitable. This will give people who could never afford lawyers (think 3rd world) access to much of the results mi…

> Did you personally write the legal contract for the last place you were a tenant of without any involvement from a lawyer? No

When I was renting my apartment in Sweden, the contract was literally one page long. It was written in such a simple language that I could understand it even with a rudimentary knowledge of Swedish.

When I was buying my apartment, the contract was four pages long, and the language wasn't much harder.

Now, with an Ethereum contract I would have to learn an esoteric programming language, look at the contract's source code, verify that it actually corresponds to an actual contract that we already agreed to.

And all that even without getting into the question of who's going to enforce this contract, and how.

And don't forget, in many jurisdictions an "IOU $50" written on a napkin is a legally binding contract requiring zero lawyers.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#83

Post by kodah »

smt88 wrote: post #79
WnZ39p0Dgydaz1 wrote: post #72

Earlier quoted context omitted.

Yes, you will always need humans to make human judgements but they don't need to be part of a court or central authority. With reputation and consensus incentive systems in place, these judgements can be made by trusted 3rd parties and feed back into the smart contract without the need for a single central authority. The point isn't to get rid of humans or trusted 3rd parties. It's to get reduce the reliance on a sin…

> It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious. This makes sense only in places with very corrupt legal systems. But if the legal system is corrupt in favor of one side (let's assume it's the landlord), why would the landlord mutually agree to arbitration? Please provide a very specific example of something that happens now that a smart contract would f…

> Please provide a very specific example of something that happens now that a smart contract would fix. I can't think of anything.

They already did, asking again isn't going to get you the answer you want.

You described the renting market as having a high threshold for bias in order to be ineffective. I don't really think this is true, it's quite difficult in most states to go to court to seek damages for rental property. Even the eviction process is not straight forward and requires the participation of both a court and a marshal to serve notice. What smart contracts replace is a lot of the court mechanisms that are low hanging fruit. It takes some stress off of the system, but certainly not all, and that seems like it could be "good enough".

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#84

Post by dmitriid »

mindcandy wrote: post #76
robjan wrote: post #71

Earlier quoted context omitted.

Most countries include some kind of arbitration when something is disputed e.g was the damage caused by negligence or wear and tear? The smart contract can't settle disputes like this without a trusted party.

Yes. But, as elaborated elsewhere in this thread, the reputable dispute arbitrator does not have to be a government agent. In countries where government agents are installed through corruption and paid in bribes, handing the 3rd vote on who gets the Bitcoin to someone based on reputation rather than appointment is a great boon.

Ah yes. The tired old "3rd world countries".

Even in 3rd world countries you will need someone to understand programming and contracts to verify that the smart contract actually implements what you've agreed on.

So you're replacing "government agents installed through corruption" with "saints beyond reproach because smart contracts"?

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#85

Post by ac29 »

mindcandy wrote: post #68
dmitriid wrote: post #64

Earlier quoted context omitted.

So, literally not better than an existing contract, but with the added complexity of coding it and having both the landlord and the tenant be programmers versed in esoteric languages to verify it.

That’s a super-bad-faith argument. Did you personally write the legal contract for the last place you were a tenant of without any involvement from a lawyer? No. Your landlord might have hired a lawyer. Mine used an off-the-shelf legal contract. For common situations like rent, open-source contracts are inevitable. This will give people who could never afford lawyers (think 3rd world) access to much of the results mi…

My last lease contract was written in English, which I can read. If it was written in, say, Solidity (Ethereum programming language), I would have had to hire someone to read it for me, or sign it without understanding it. That was the point.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#86

Post by ac29 »

WnZ39p0Dgydaz1 wrote: post #69
lottin wrote: post #65

Earlier quoted context omitted.

The point is that such a contract requires a central authority that must be capable of evicting the tenant. A "smart contract" which is just some code running on a computer certainly can't do that.

Why do you require a central authority? What you require is this: 1. An incentive to evict someone. Money. Someone needs to get paid to actually do the eviction because they are taking on some risk - physical in this case. It doesn't matter how they get paid. A smart contract can do that. 2. "Social/Legal consensus" that performing the physical eviction is the right thing to do. The person performing the eviction sho…

Who is this mysterious evictor/enforcer?

Also, you are ignoring the fact that, at least where I live, only one entity can legally evict a tenant - the county sheriff (in their role as an agent of the court). You cant just hire some random thugs.

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#87

Post by dmitriid »

WnZ39p0Dgydaz1 wrote: post #69
lottin wrote: post #65

Earlier quoted context omitted.

The point is that such a contract requires a central authority that must be capable of evicting the tenant. A "smart contract" which is just some code running on a computer certainly can't do that.

Why do you require a central authority? What you require is this: 1. An incentive to evict someone. Money. Someone needs to get paid to actually do the eviction because they are taking on some risk - physical in this case. It doesn't matter how they get paid. A smart contract can do that. 2. "Social/Legal consensus" that performing the physical eviction is the right thing to do. The person performing the eviction sho…

> An incentive to evict someone. Money.

Welcome to mafia shakedowns

> "Social/Legal consensus" that performing the physical eviction is the right thing to do.

That "social/legal consensus" is called laws, and they are enforced through a central authority.

> If the state and breach of contract is transparent on the blockchain

Who exactly is deciding "the state and breach of contract"? You can start from the fact that smart contracts are not even written in a human language.

> A way to confirm the eviction to pay the evictor.

People were paying each other for thousands of years without smart contracts

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#88

Post by pgesmm »

keymone wrote: post #36

Yes. Everything you described relies on central authority. For those who would like to not rely on central authority - cryptocurrencies provide real economic value. It’s trivial to the point where it’s impossible to distinguish you from a troll.

Why a troll? I asked a question and provided reasonable arguments for my belief. - "Not wanting to rely on a central authority" is a political theme. - In my opinion saying "I use crypto because I do not agree with my governing central authority" is not really a good application (as I asked for in my question). You don't even have to commit illicit activities in a universal/ethically right way. It suffices to do "illicit" activities in the view of the government to get you into real trouble (jail time or worse). So to say "I use crypto as an expression of protest" seems like a questionable application to me

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#89

Post by pgesmm »

mindcandy wrote: post #77
pgesmm wrote: post #75

Earlier quoted context omitted.

Good point, but are cryptocurrencies then needed (adding currency trafo risks)? Further, how do you select the trusted 3rd party--can't you get screwed here if there are "multiple" 3rd party notaries? As far as I can see, you can't get rid of some "central" authority

At some point you have to trust somebody. Who is more trustworthy for your situation: a government agent, a financial officer or some reputation service? Think about that as someone in a third world country...

It's not that simple. Have you ever had to do anything with real legal complex matters? For example for patent suits, I am not sure if I didn't prefer a qualified and experienced set of judges over an anonymous hobby crypto arbitration court.. Don't kid yourself, you can get (and will) screwed in every which way. I also don't know much, but I think there is a lot a lot of illusion going on about "smart contracts"

Re: Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

#90

Post by smt88 »

kodah wrote: post #83
smt88 wrote: post #79

Earlier quoted context omitted.

> It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious. This makes sense only in places with very corrupt legal systems. But if the legal system is corrupt in favor of one side (let's assume it's the landlord), why would the landlord mutually agree to arbitration? Please provide a very specific example of something that happens now that a smart contract would f…

> Please provide a very specific example of something that happens now that a smart contract would fix. I can't think of anything. They already did, asking again isn't going to get you the answer you want. You described the renting market as having a high threshold for bias in order to be ineffective. I don't really think this is true, it's quite difficult in most states to go to court to seek damages for rental prop…

> They already did, asking again isn't going to get you the answer you want.

The person I was responding to gave only generalities.

> What smart contracts replace is a lot of the court mechanisms that are low hanging fruit.

What court mechanisms?

Let me give you a specific example.

I'm a landlord with a rental contract. In my state (as in many states), there are hundreds of statutes dictating the boundaries of this contract. There are also thousands of cases in common law that influence what I can and can't contract. For example, my tenant cannot contract away certain rights, even if they sign a legal document saying that they did it.

Scenario A: I use a smart contract stipulating that if there are damages, I can hold the security deposit.

Scenario B: I have a paper contract stipulating the same (although in many states there are statutes that say this, so the contract is just repeating existing law).

Now let's say I find "damage" and the renter disputes it.

How has the smart contract helped me? What difference did it make? In many situations, the smart contract enforcing itself without 100% understanding of the physical world or existing law would violate the law.

So that's how specific I'm asking you (or anyone) to be: give me a specific scenario where the smart contract enforces something in a reliable, efficient way that is significantly better/safer for either party.

Post reply on HN