this post was submitted on 18 Aug 2023
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Apparently, smart contracts are not contracts at all... they are friendly suggestions. Unsurprisingly a contract needs a mechanism to enforce it, which makes decentralized contracts redundant at best (as you still need institutions outside of the blockchain to monitor and enforce the contracts), and or worse, completely useless if there is no legal way to enforce them.
The idea behind smart contracts is that they contain code to verify that the contract is fulfilled (that’s the “smart” part of the name).
This of course also means that you can only use it for stuff that happens on the same blockchain, because the contract can’t verify anything outside of that.
Which is why this isn’t relevant for the real world, it’s just eating its own tail.
Yeah I was tempted to add a caveat, it does technically auto executive, but because it needs to interact with the real world it will always run into the oracle problem. The only solution to the oracle problem is courts and tort law, which makes the blockchain contract redundant and unnecessarily expensive.