Topic: The legal status of Smart Contracts (Read 2706 times)

I expressed myself wrong...

I know ETH Smart Contracts. hhahaha

I was talking about Bitcoin Smart Contract... the key on ETH is the S.C... it's the strong hand of this currency... but using the bitcoin blockchain is completely different... as I'm not a very skilled programmer (just do some tests and play a little with php, js, python and c++) I don't know if it's possible, and if it's not, how could this be made.. I mean, there's another way to do some kid of smart contract? Because ETH has it's own blockchain and the kernel provides this usage like an "super" open-source software...

It's hard to explain, sorry about that... but resuming, it's a usage of "some kinda" SC for BTC blockchain.

This does already exist and is called "Smart Contracts" in Etherium. It's a blockchain-based "world computer" as they call it themselves. What you would do is code up a smart contract that contains the requirements that you need and have it hold funds (in the case of a bet or something). The contract itself would own the funds and none of the participants in the contract would have the option of removing them from there unless under the conditions that are specifically programmed into the contract.

The issue that you mostly have with this is that the Etherium program (the contract) can not have any contact with the outside world. It cannot look at a sports or weather website to see who should get paid. You need some other way of giving the payout triggers to the contract. One way would be to use one or more trusted services to post the weather or sports results to the Etherium blockchain (in another contract). Your contract can then use that other contract's data to decide who needs to get paid.

Another issue is that the contract cannot trigger itself. It cannot decide that it needs to pay Alice or Bob and then do that. Once the results are in (the sports results are known in the blockchain), someone - probably the winner - will have to ask the contract to process the results and pay out.

In short: A Smart Contract doesn't have to be trusted by anyone, the contract itself is in control of the money involved and not any of the participants or even a trusted third party.

As for the legal status of a smart contract, good question. You'd have to make sure that the initial creating of the contract by both parties is also in the blockchain. You cannot just upload a contract with Alice and Bob's addresses hardcoded in there. You have to make sure that the deployment of the contract and the agreement of both parties to the terms of the contract is explicitly recorded in the blockchain. Alice and Bob will have to both make a transaction to the contract, depositing their funds and signaling their willingness to participate.

THAT IS what I'm searching for... I think it will be the key thing in these days.

Maybe it could integrate with some systems like ebay, aliexpress or Mercado Libre, etc. I mean, your example is a little harder to "proof", but let's say: "I want to bet with my brother if, in the next game of premier league, Manchester City will beat Tottenham or not, and if Arsenal will beat Leicester" ... I know there's lot of gambling websites but, let's say that we want to bet each one U$50 in the first game and U$65 in the second. I could make a free announcement and use an Smart Contract to link it with some sport result website  (as a mean of proof).

Another example could be like: I bet U$100 that D. Trump is gonna win in (some state) and my brother could bet in another state. And link that to some politics site. Or another example, I bet that (some ponzi scam website) will fall in 30 days or less and some other guy in another country could bet contrary and based in a statement made by certain number of users in this forum, the contract could be solved.

Maybe I'm crazy, but, another example could be made by lending/loans, in a manner that, "I ask my brother to lend me U$200 and I'll pay him 'till next fryday". I could write label in blockchain.info (determined in the contract) and compares it with the value deposited.

I don't know, maybe this already exist and I'm talking shit over the thread.

 

Thanks for the example.  If you were to use a smart contract, then Bob would have not have the option not to pay.  A smart contract would be set up so that when the bet was placed, funds would be placed in escrow meaning that the winner of the bet would be paid automatically depending on the weather the next day (as you can appreciate, such a bet would not be ideal for a smart contract because there needs to be an automatic trigger for the contract to execute).

Giving another example - a good use for a smart contract would be between a consumer, a supplier and a delivery company.

The consumer places an order and has funds in escrow.
The supplier sends to the delivery company for delivery
The delivery company delivers and obtains an electronic signature

The signature is the trigger event - it would trigger the payment to the supplier.

I hope this helps.  The thing is, smart contracts, the blockchain, the whole technology is still emerging and being discussed.  There is no real right and wrong use for a smart contract at all.  It is just thinking out how it would work.

Using the example you gave, it would work if there were some kind of electronic sensor/weather station that can trigger the payment to either Alice or Bob depending on the weather at a certain place at a certain time.

Yes, I want to use smart contracts for a bid project. Something related to gambling. See, two people betting for (let's say) the weather. Bob says tomorrow is going to be cloudy but Alice predicts a day with storms and lot of rains; so, they want to put some money, take the smart contract and agree.

Now, happens that Bob don't want to pay and Alice want to make some legal dispute. Is it going to work the smart contract in this case?

You asked for an example.

It depends wholly on how you want a smart contract to work for your business.  Can you give an example?  Generally, although labelled 'smart contracts', they would not ideally be a contract upon which you would rely if you were to issue court proceedings for breach (for example, terms and conditions).  Any smart contract is agreed, binding and entered into before placing on the blockchain so if you were to be placing your agreed contracts online, the only real benefit would be that the contract is recorded and placed there so it is always available and cannot be lost.

I was investigating the smart contracts and the possible applications in my everyday life. If I want to use it with a company (for example) I need to know how the law protect these documents.

I'm not asking about a specific country but only generically speaking. Is there any country where use the smart contract is legal per se? Or is under the law specifications the use of smart contracts?