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The possibility of remaking the financial system with the blockchain

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Re: The possibility of remaking the financial system with the blockchain

#61

Post by avmich »

valarauca1 wrote: post #18

Blockchains cannot understand intent like a human courts can. The idea that intent is an important part of determining the punishment/morals of the crime came out of the French Enlightenment. I'd really rather not roll back this. The difference between an accident , manslaughter , and first degree murder are non-trivial and VERY IMPORTANT . Also fuck you if you want to train an ML bot to that job. You clear don't get…

> Blockchains cannot understand intent like a human courts can.

> Also fuck you if you want to train an ML bot to that job. You clear don't get it.

Very interesting :) - can you elaborate more?

Re: The possibility of remaking the financial system with the blockchain

#62

Post by chrispeel »

libertymcateer wrote: post #12

I do not buy this for a minute and to be fair the headline misrepresents the much more sober tone of the actual article, to the authors' credit. I am not a fan of cryptocurrency in general (that is another argument for another day) so I am just going to focus on one claim regarding law firms: the rise of the smart contract. I do not believe it is a realistic expectation, and here is why: The vast majority of contract…

I think it's best to think "distributed computer program" when you hear "smart contract" in relation to blockchain-based code. The initial decentralized applications that will be built on blockchains will not be trying to emulate legal contracts. They will rather be focusing on things like a decentralized Dropbox, fully decentralized messaging, decentralized social networking, etc... You can make a separate argument about whether those things will succeed or not, yet they are certainly not legal code. Nick Szabo invented the term "smart contract" and his favorite example is a vending machine: you put money in, it gives you what you ask for.

Re: The possibility of remaking the financial system with the blockchain

#63

Post by junkyarddog »

LeanderK wrote: post #17
libertymcateer wrote: post #12

I do not buy this for a minute and to be fair the headline misrepresents the much more sober tone of the actual article, to the authors' credit. I am not a fan of cryptocurrency in general (that is another argument for another day) so I am just going to focus on one claim regarding law firms: the rise of the smart contract. I do not believe it is a realistic expectation, and here is why: The vast majority of contract…

i think the questions are: - whether a significant share has testable conditions - whether eventual regulatory burdens can get diminished - whether the benefits for a use-case make it possible to introduce testable conditions (like this: https://news.ycombinator.com/item?id=13807297 , or i was recently on a hackathon organised by a power provider who fears a blockchain-based marketplace will put him out of business.…

Agreed. A turing-complete language isn't the ideal choice for smart contracts. A strongly typed ML or Haskell style language would have been a much better choice as a starting point.

Re: The possibility of remaking the financial system with the blockchain

#64

Post by [deleted] »

LeanderK wrote: post #17
libertymcateer wrote: post #12

I do not buy this for a minute and to be fair the headline misrepresents the much more sober tone of the actual article, to the authors' credit. I am not a fan of cryptocurrency in general (that is another argument for another day) so I am just going to focus on one claim regarding law firms: the rise of the smart contract. I do not believe it is a realistic expectation, and here is why: The vast majority of contract…

i think the questions are: - whether a significant share has testable conditions - whether eventual regulatory burdens can get diminished - whether the benefits for a use-case make it possible to introduce testable conditions (like this: https://news.ycombinator.com/item?id=13807297 , or i was recently on a hackathon organised by a power provider who fears a blockchain-based marketplace will put him out of business.…

[deleted]

Re: The possibility of remaking the financial system with the blockchain

#65

Post by jbpetersen »

dang wrote: post #55
libertymcateer wrote: post #12

I do not buy this for a minute and to be fair the headline misrepresents the much more sober tone of the actual article, to the authors' credit. I am not a fan of cryptocurrency in general (that is another argument for another day) so I am just going to focus on one claim regarding law firms: the rise of the smart contract. I do not believe it is a realistic expectation, and here is why: The vast majority of contract…

OK, we replaced the baity title with representative language from the article. If someone suggests a better (more accurate and neutral) title we can change it again.

"Blockchain tech is reinventing finance and law" perhaps?

Re: The possibility of remaking the financial system with the blockchain

#66

Post by jbpetersen »

valarauca1 wrote: post #18

Blockchains cannot understand intent like a human courts can. The idea that intent is an important part of determining the punishment/morals of the crime came out of the French Enlightenment. I'd really rather not roll back this. The difference between an accident , manslaughter , and first degree murder are non-trivial and VERY IMPORTANT . Also fuck you if you want to train an ML bot to that job. You clear don't get…

Alternately, you could start up a prediction market on how likely the accused is to commit crimes in the future based on potential sentences, sell shares of their future income in order to incentivize proper rehabilitation, weigh the various registered values of voters to determine how much money and time should be sacrificed for the sake of seeing the guilty punished, get the case analyzed by various remote contractors who have proven records on predicting verdicts, and various other ambiguously utopian/dystopian "improvements" to the legal system of today.

And how long until you can train the ML bot to do better than a randomly selected jury at predicting what a larger jury would make of a case?

Re: The possibility of remaking the financial system with the blockchain

#67

Post by infruset »

junkyarddog wrote: post #63
LeanderK wrote: post #17

Earlier quoted context omitted.

i think the questions are: - whether a significant share has testable conditions - whether eventual regulatory burdens can get diminished - whether the benefits for a use-case make it possible to introduce testable conditions (like this: https://news.ycombinator.com/item?id=13807297 , or i was recently on a hackathon organised by a power provider who fears a blockchain-based marketplace will put him out of business.…

Agreed. A turing-complete language isn't the ideal choice for smart contracts. A strongly typed ML or Haskell style language would have been a much better choice as a starting point.

That's exactly what Tezos [1] is proposing: a strongly typed language whose semantics is currently being formalized in the Coq theorem prover.

[1]: https://tezos.com/pages/tech.html

Re: The possibility of remaking the financial system with the blockchain

#68

Post by another-dave »

sanswork wrote: post #32
geodel wrote: post #25

Earlier quoted context omitted.

All excellent points. I wonder if it fall in some 80/20 rule. 80% contracts may be bog standard and ripe for this kind of automation while remaining will get attention of staff. I am thinking of contracts for jobs, lease, repair works etc.

Contracts like that are almost all available as cheap templates. Smart contracts won't even solve these though. How does a smart contract solve the problem of mold in an apartment where the tenant claims it was existing and the landlord claims it was due to tenant misuse?

I'm new to the whole area, so maybe it's my lack of knowledge of what "smart contracts" are meant to be, but is that something they are claiming to solve? I mean, how would a regular contract solve it — it wouldn't, a judge would solve it after you'd taken your landlord to court.

Are smart contracts proponents saying that they'll do away with the whole legal system, or just the solicitors' fees/time for drawing up contracts in the first place?

I presume I'd still be able to take my landlord to court for breach of contract for anything related to physical world (the bathroom is mouldy or he disputes the condition I've returned the apartment in and is withholding my deposit), but wouldn't need to pay £80 to get the contract drawn up in the first place.

And then all the 'meta' stuff, that doesn't relate to tangible things, is built-in and testable — e.g. rent cannot be increased more often than every 6 months and can only be increased by up to 15% of the current fee; at the end of the lease, the deposit minus cleaning fees should be returned within 30 days, with any interest earned.

Re: The possibility of remaking the financial system with the blockchain

#69

Post by lefstathiou »

libertymcateer wrote: post #12

I do not buy this for a minute and to be fair the headline misrepresents the much more sober tone of the actual article, to the authors' credit. I am not a fan of cryptocurrency in general (that is another argument for another day) so I am just going to focus on one claim regarding law firms: the rise of the smart contract. I do not believe it is a realistic expectation, and here is why: The vast majority of contract…

I see the objective of smart contracts in finance as an augmentation of the human auditing that is already taking place. You don't need 100% of the contract to be smart in my opinion but I'm not an engineer so what do I know.

For example let's say you're at JP Morgan and are operating a $10 billion conduit ("warehouse") facility. You have a series of eligibility criteria for every originator contributing loans into the program (each of which have dozens of measurable events like average FICO, seasoning, prepayment speeds, days delinquent, etc) in addition to the vast plethora of nonfinancial terms and conditions you pointed out. Every month, these originators file a monthly remit report which in theory must be accurate (failing to do so could instantly eliminate your access to the conduit and tank your business, not something to take lightly). Right now, a banker must process all of the monthly remits for each individual facility and compare them against what was agreed to in the docs. There could be a hundred contributors to the conduit and if you happen to sit on said desk there will only be 2-3 of you managing this process. It simply can't be done.

I've spent a lot of time looking at smart contracts and block chain and have walked away a bit skeptical. There are some very real and very serious issues this in theory can address, I just think there are better ways to do it.

Re: The possibility of remaking the financial system with the blockchain

#70

Post by lefstathiou »

jbpetersen wrote: post #65
dang wrote: post #55

Earlier quoted context omitted.

OK, we replaced the baity title with representative language from the article. If someone suggests a better (more accurate and neutral) title we can change it again.

"Blockchain tech is reinventing finance and law" perhaps?

*could potentially reinvent finance and law
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