What I'd greatly appreciate is a walk through of a plausible real world use case. I find it hard to concentrate on the technology itself until I understand the application.
I can go on for a while longer, there are hundreds of use cases but the question is: what would be a use case for you?
I'm not demanding it and I'm not being snarky at all. It's just that's the level I'm at - without that kind of entry point I struggle to assess it.
1. Me and You start a company together. We would like to split things 50/50. We setup an address such that when values are paid to it, half goes to you, half goes to me. Effectively we've created an "LLC with an Operating Agreement", but we aren't relying on political legal system / country to enforce. Enforcement is automatic and done by the network.
2. You want to setup a Trust for your kids. You create a contract that holds 10 Bitcoin / Etherum / etc. On the date Jan 1, 2035 the value of that address will be forwarded to your child's address. Again, we created a "Non-Revokable Trust" that is network enforced. No need for probate, courts, trustees, etc.
I assume in case 2 Solidity language has some built-in mechanisms for ensuring that the current datetime is agreed across the whole network?
Your question of "consensus" brings up other interesting points. I think an increasingly valuable service in a new smart-contract world will be to have an "Outcomes As A Service" arbiter. This would be a trusted 3rd party that publishes real-world outcomes in a method that can be accessed reliably via smart contracts.
Who will win the football game between Dallas and New Orleans on Nov 22, 2019? Who is winner of 2020 Presidential Election? etc....Essentially a service that you can tell them you want to track some real-world event and publish outcome for use in smart-contracts. Obviously this 3rd party would need to be transparent, have an open appeal process, be neutral and earning income not tied to outcome, etc.
What happens to gaming laws (and cities like Las Vegas), in a world where sports betting can be done with no middle-man needed?
How do the nodes running the code all get the same response from an external data source?
Even if they use a service such as oraclize if the contract calls https://api/query?param1 and it returns lets say the weather:
Node1 gets: 15.2c Node2 gets: 15.3c
We've already failed on consensus haven't we?
It will send back your ETH after a certain date. You can check the smart contract in the bottom left corner.
Then if a user Y did come along and wanted to buy my stake, we'd agree a price P, then I would write a second contract that said: If user Y pays user X amount P, then call sellUserXStakeTo(Y). Then, once I'd published it, user Y would verify it, then pay the money, secure in the knowledge that I could not alter or back out of the deal.
2- How do you make sure that your child doesn't sell it in 2025 and buys a Lambo? (which is a problem you don't have with regular Trusts AFAIK)
Him: "This baker makes bread rolls". you: "What about dark bread? What about non-bread items? What's his broker?"
SeckimJohn quite quickly showed why neither work. The are some niche digital uses, but not the ones people often tout.
Ethereum contracts basically break down at the point they need to interact with the real world.
As I understand it each concern requires some kind of function/method which addresses it within the smart contract, right? So the real problem is that once you publish the contract you better make sure you haven't forgotten something important...
For instance, I can't think of any corporate structures that splits income in half. Usually the money is run through the company and costs etc. are taken out first. So this isn't a real world example?
Which they both need to work today anyway. So whats the point?
Until ether contracts can hold people to their word, are recognised by the judicial system (which wouldn't be able to effect it without some weird judge API), or is able to enforce some kind of judiciary process itsefl (SKYNET WARNING), they'll always break down at the physical barrier.
Smart contracts being fixed and errors being exploitable is a valid criticism but it's not the be-all-end-all argument for them to have no real world applications.
In the trust fund example, you cant stop the recipient trading their key or wallet early, as you have no way to verify the human holding it.
Unless you keep that access with some legal guardian. In which case your security still sits in the legal system, as it would if you just used a trust fund. So whats the point?
Again in the company example, it only works if you both observe that the coins mean shares in company. Which you can only really enforce with a legal agreement, but again, why not just have a legal agreement that says you split your share?
They completely breakdown at the physical barrier. Darknet markets only work because the seller doesnt control the market and has a deposit. But apart from that they can transact anonymously, that part has nothing to do with blockchain.
the main point I tried to make above was this: in normal life there is the "human factor"; like, if you look at a situation, you can reasonably comment on whether it's a positive situation from an actor's perspective; whether the actors were engaging in fraudulent activity etc. In digital-only world, there is no such thing as "probable cause", "reasonable doubt" etc.
which makes the application of smart contracts to real life intractable(IMHO borderline impossible for complex situations for the near future[~10 years?]).
There are so many things that go into contracts that cannot be articulated in 'code' that this all hardly makes sense.
Employment contracts are long. Comp packages can be complex.
And we all live in countries with employment laws etc. that require these things anyhow.
I don't see any actual real-world cases for Eth contracts just yet.
I think this is actually something I've been trying to articulate for a while now anytime smart contracts come up.
Legal contracts only specify the criteria and conditions surrounding a contract. Smart contracts must describe that PLUS all the very specific instructions on how to validate those criteria/conditions which adds a massive amount of complexity into the contract (and more potential for loopholes).
Ensuring that accurate, real-world data gets entered into the blockchain to enable broadly useful smart contracts is going to be an interesting area to monitor over the next few years.
Augur attempts to align people's incentives to accurately report on real world events, like political events (aka Oracles). Axa pays out on delayed flights with a new flight insurance product[1], from data gathered from public flight information, which triggers an automated payout.
Not so fast. Who says 'what the price of ETH' is? There is no such thing as 'the price of ETH' - there are simply buyers and sellers each willing to sell and buy at different amounts.
You'd have to agree on a mechanism to agree on what that price even is.
And what about odd fluxuations? Market cheaters - i.e. getting a hold of a vast quantity of ETH just to jolt markets for a few hundred milliseconds just to jigger some contract?
As far as 'paying out on delayed flights' - that's a very cool idea, but I can't imagine why on earth it would be in ETH on a distributed ledger.
Realistically anything that requires people to have decent data management / opsec is going to fail for >99% of people.
If the beneficiary dies before 2035, their heirs will collect, for instance. It is pretty simple to do a TVM calculation to determine the current value of a future benefit, and without all that legal-system stuff that is being bypassed through use of smart contracts, the intent of the trust creator can be more easily bypassed.
In 'no legal land' it would be easy enough to sell a bunch of 'locked until 2035' etherium - wrapped in another ether contract like a future or something. Much the same way lottery winners who get an annuity instead of a lump sum can then sell that annuity for a lump sum.
What is the real world use case for that, though? That seems like a contract that makes sense as long as you and I trust each other, which rather negates the purpose of a contract.
Some immediate issues that strike me:
* There's nothing to stop either of us offering the services of the company outside of that contract;
* There's no way to ensure that one of us isn't freeloading;
* If my wallet gets stolen you'll be paying half the earnings of the company to the hacker until the contract is somehow voided;
* Which raises the question of how can this contract get voided? Do either of us get to void it whenever we feel like it? What if I've lost my key? Do we potentially just have to live with the money being paid into hacked / unusable accounts forever?
So all you've really saved is the bother of dividing a number by two and doing bank transfers, in return for which you've gained significant operational burdens.
To give you an example of what I mean: when Bluetooth was in its early days everybody kept repeating this stuff about your Fridge being able to talk to your Toaster. They wrote imaginative articles about Toasters that told Breadbins they had just toasted the last two slices of bread or whatever. This didn't help me at all to understand a perfectly good technology. It was, frankly, distracting BS. If someone had said you could have headphones without wires (and perhaps they did) I would have gone: Ah hah! Now that may show you the hard limits of my technological imagination...but to me that's the kind of the thing that sells a new technology.
I think simple examples of things we currently need to do, with practical examples of how we can do them a different way is what helps me to understand things.
The Solidity docs have tutorials for voting and auctions: https://solidity.readthedocs.io/en/develop/solidity-by-examp...
And I've got various simple ideas with code at my blog: http://www.blunderingcode.com/
This "problem" (which is kind of an euphemism, you could just call it "scamming") is not solvable without having a blockchain as a neutral entity that secures the tokens in question. Just giving people the same essentially-worthless "fantasy tokens" stored in a conventional database that you promise to maintain will not cut it, as people won't give you hundreds of millions in this case, but will readily do so once your tokens are on a blockchain.
Smart contracts just sound like... normal contracts. Like the ones that have been around in some form or another for millennia. Most contracts are just "if X then Y" but using legal lingo instead of code.
The difficult part about something like a prediction market is that it's hard to get an authoritative source for the result. How can you prevent a fake result being sent out, for example?
In the same way that Bitcoin allows people to send money to each other without having to trust the other person, you can do computation without having to trust a centralized party to do that computation. And it doesn't have to be "computing" in the way you might think about it; it can be tracking, storing and securing information (generally a hash of that information) with some logic around it (who can append, payments, vote on things, etc.).
I wrote a blog post about some potential use cases. Most of which are realized only with smart contracts. Some are pretty "out there," but in the end it up to the innovators of the world to decide what we can or cannot do with this.
http://www.gjermundbjaanes.com/the-blockchain-innovation-par...
So maybe it's not such a great idea after all.
* since this involves interaction with the outside world, I don't know a way at this point that 100% guarantees that your get your power. Curious how they tackle this.
Car continuously delivers micropayments to charger while charger continuously delivers power to car, if one stops the other also stops. If the power is cut off prematurely the car only loses maybe a couple cents worth of power.
(Payment channels are built using smart contracts, but they’re simple enough that Bitcoin’s more limited smart contracts can do it)
Admittedly that’s not a big problem with gas pumps (at least where I live, though card skimming is definitely a thing) but you can easily imagine other use-cases. For example your computer could automatically pay an untrusted WiFi hotspot per MB (and automatically pay the VPN you use to secure said untrusted WiFi hotspot)
Zero counterparty risk digital microtransactions have never been possible until now. I’m pretty sure it will eventually be cryptocurrency’s killer application.
If I’m sending 1 cent micropayments continuously as long as the services are being delivered (e.x. 1 cent per 1 MB WiFi, 0.1 kWh electricity, or 0.5 oz gasoline, etc) then the most that can be stolen is 1 cent, so why would they bother?