> Smart contracts on public blockchains solve this by committing coins to the contract. In effect the contract is an escrow facility in which the coins are locked up until the contract terminates.

So if this is true, one could never write a call option on Ethereum because the downside risk for the writer is unbounded and you cannot put infinite coins in escrow.

As an aside, given the escrow component, there seems to be no credit/counterparty risk in any ETH smart contract, but for the most part if there is not risk transfer or sharing is there really any commerce to do?