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Comment by staunch | Hacker News Reader

Pensions are a great use-case for smart contracts. I would feel much safer having my retirement assured by a blockchain than a bureaucrat.

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How would this work? As I understand it pensions are almost never fully funded when they begin because the costs would be prohibitive. Can a smart contract guarantee that funds that are not available now will be made available at a later date?

It wouldn't work, almost nothing people want to do with smart contract can actually work because those people tend not to actually understand what a smart contract is or what it can actually do and what it can't do. Virtually every smart contract proposal is DOA due to a misunderstanding of their nature.

What's missing from your claim is any justification for it all. You're just claiming, on zero authority, that it's not possible. So enlighten us.

Why do you think it's impossible to encode the mechanics of a pension in a smart contract-based system?

I didn't need to, the comment I replied to already addressed a valid why. Smart contracts can't enforce access to funds without locking the funds up from other use, and that's not how things work in the real world. Pensions aren't savings accounts where funds are locked up ready to be used in a black box. They can't interact with the real world without trusted oracles, but we already have that in the real world and they're only real use is when they can do something deterministic on chain. In short, they're largely hype without a real problem to solve... so far.

You're just claiming it's impractical today, not technically infeasible for any reason.

1. Pensions don't currently work like this

There are many thousands of different pension systems across the world.

It stands to reason that you could create new system, and if it had significantly attractive advantages, people would use it.

2. Trusted oracles are a problem

Yup, we need more decentralized services that smart contracts can take advantage of. Wait a few years, they're coming.

3. Smart contracts are only useful for deterministic changes

Making deterministic change is precisely what you want. Do you mean statically defined? Because that's obviously not correct. And are you considering a new system specifically designed for pensions?

Virtually all innovative technology is "hype" until it isn't. I agree we have a ways to go.

Hence my final words, so far...

> Making deterministic change is precisely what you want.

Yes, but that's a problem when you have to interact with the real world which isn't.

To the extent they are funded, that money could never be rescinded. And you could negotiate early funding as a feature now, because it would actually mean something to the recipients. There are no untrustworthy promises required.

And you could do new things based on control of your pension, which might radically change how we think of them.

The main thing that smart contracts remove is the need for trust. And that's the main problem with pensions.

The "smart contract" is still reacting to things in the real world. It's not going to magically cause the stock market to not fail. And, as we've seen, they are vulnerable to hacking.

It doesn't magically solve all problems, just the most important one. Trust.

How?

You don't have to trust anyone with access to your pension not to steal from it, because no one has access to it.

The promise that is your pension would be cryptographically enshrined in a blockchain, with full transparency.

That's... that's not really true. For one, we've already seen how these "smart contracts" can be hacked. I can almost guarantee that they will put something in them that will allow them to take the stuff back.

And that hasn't really explained how the funding would be there.

Better yet, one could have completely private pension plans, where everyone is safe from both bureaucrats and kleptocrats.

Congratulations, you've just invented the IRA.

It's not completely private if bureaucrats tell you what you can or cannot do with it, as well as when you may do it, stealing from you if you step outside of their rules.

Using a broad definition of theft merely serves to raise the noise floor. Your definition of "completely private" seems like "free markets" or "perfect competition": that is, things which are free from government interference only in misanthropic delusions. As Jefferson explained, stable ownership is not a natural concept; that you are considered to "own" things absent direct physical possession is a function of society. We also collectively agree to believe in this thing called 'money', which is also not an inherent property of mankind. That society can dictate rights and rules about property is inherent to the concept of each.

Completely private accounts are called savings accounts; governments aren't telling you what to do with your money, they're telling you what you have to do in order to avoid that money being taxed, IRA's offer you a benefit, that benefit isn't without strings. Smart contracts offer nothing here you can't already do easier.

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