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.