In the thought experiment of a true anarchy, how do you ultimately enforce the off-chain part of a transaction? If BTC is traded for goods or services, how do you enforce that the goods and services have been sufficiently provided?
In the real world, when disagreements arise, we have voting + due process + a hierarchy of courts. It could be argued that due process is an essential part of finding justice.
Baking due process into a smart contract is, although extremely interesting, probably impossible.
Smart contacts exists so that you don't need the heavies nor the guns, you can just exploit a "bug" in the contract and run off with the cash, preferably without anyone knowing who you even are.
It's nice when everyone abides by the same ruleset. But there will always be individuals that will behave outside of it.
Like, we can all play capitalism and try to outcompete each other, but eventually there's going to be someone that just abandons that ruleset and murders all competitors.
Smart contracts are just a better ruleset, still not enough.
I can still just seize the factory, ledger be damned.
Or deploy a military to seize your private keys. Unless you're sole copy is in your own head it's on a hard drive SOMEWHERE
http://www.daviddfriedman.com/Legal%20Systems/LegalSystemsCo...
Of course, that’s just the simple, “immutable logic” kind of smart contracts. The “updatable policy” kind of smart contracts are really just a way to encode and implement a legal system. (See: the regulation model in security tokens.)
(People are already doing the virtual equivalent for prediction markets: everyone who cares runs their own oracle agent to forward result data from web2 sources into web3. You “just” need computer vision + good optics to bring that paradigm into the physical world.)
https://bitcoincore.org/en/2016/02/26/zero-knowledge-conting...
It leads to the question of what is the real purpose and utility of a distributed blockchain? If the blockchain can willy-nilly be gamed and won't be enforced, why have it?