Topic: Valid uses cases for Smart Contracts, Dapps, and DAOs? - page 4. (Read 4693 times)

Are "virtual corporations" really a great idea?

Could creating such autonomous entities actually make the world an even worse place?


http://ciyam.org/open/?cmd=view&data=20140611150753590000_P&ident=M100V112&chksum=049897de

gustav, I think OpenBazaar may be a valid wide adoption use case, and off the top of my head (without thinking deeply about it), appears we need the block chain to validate each state transition around transactions and listings, so that rules about reputation are enforced and validated by the block chain. Otherwise, the criticisms I levied against CounterParty will seem to apply to OpenBazaar.

I do agree those investing in the smart block chain schemes aren't really interesting in mass adoption. They want get-rich-quick money pooling schemes.

It will enable touring complete and fully automated ponzis. It will be a new era for pyramid schemes.
The everyday person does not have demand for smart contracts actually. It's a tool for scammers and a toy for geeks. Nothing else.
No banker or businessman in their right mind would run contracts on that chain for financial purposes.

Note the edit in bold at the end:



Can anyone think of any use cases for smart block chains that has any wide adoption potential  

So far, I can't think of any killer app that is enabled by smart block chains.

An OpenBazaar market place? Do we need a smart block chain for that? It seems that for example CounterParty and OpenBazaar could benefit from some custom scripting so their hashed data (e.g. reputation updates for OpenBazaar and contract validity for CounterParty) is verified by the block chain they are running on.

I wouldn't touch the DAO or ETH. All the hype-promises will be broken. Things should drop a lot from here. Just a matter of when. Could be a shitcoin by next year ...
Hope polo enables shorting DAO soon so i can make some gains on this before it goes up in flames.
It certainly will be an epic show with that much money involved.

Yup that is what it appears to be. But can you fathom what this is going to do to all the bagholders and to ETH.

I got your point that maybe there is some game theory to how long you stay vested. You like Russian Roulette I guess.

The SEC will be coming... this is the event that will start the SEC's involvement in actively regulating CC. Thanks to Vitalik and Tual.



The game theory issues appear to be fundamental. Meaning they can not be fixed.

It is analogous to wanting to build a skyscaper to the moon. We can't do it. No matter how good our technology is.

Some things are truly impossible.


Bribe the curators.

This is just the corruption of government we are all fighting to remove with block chains and then we bring it right back again and place this $150+ million UNREGULATED honeypot to attract the flies.

Since it is unregulated, the criminal mindsets will be drawn to this like flies to honey.

It is just a matter of time before The DAO is in political bickering and probably worse with the power vacuum being always a "winner take all" phenomenon.

I see the DAO as a game of who can compromise it first and cash out the funds to themselves.

In the case of DAO, Slock.it, and Augur, then that seems to be the case. There is no valid use case which isn't game theory broken for those. Expect The DAO to eventually collapse in a massive clusterfuck of theft and waste with most losing their money. Wise people would get the hell out of The DAO as fast as they can, because the DAO is broken in the sense that you can be jammed from exiting.

Decentralized crowd funding might be viable.

it is hype for scam purpose only

Forum please help me.

Originally I couldn't envision many valid use cases for this new craze building on top of more powerful block chain scripting and the block chain as a generalized state transition database, i,e. the block chain + scripting as a Turing complete machine.

And that was to a large extent because data feeds on external events break consensus algorithms. But then I realized that external events can be voted on.

Any contract that requires an external data feed breaks the ability to have a valid consensus algorithm. So this limits us to scripting which refers to data that is already on the block chain, i.e. the only thing that a block chain can validate are state transitions from an initial set of data, i.e. the genesis block.

So this basically limits what block chains can do, to financial contracts that involve how value is transferred over time and voting. Our contract logic can't refer to events that occur external to the block chain, except by voting. So this means external data feeds (events external to the block chain) can only be accommodated as voters, i.e. if one reporter of the event is authorized then it is a 1-of-1 quorum and if there are 5 reporters of an external event, then say our contract requires 3-of-5 to agree on the report, and then of course the contract has to have logic for what to do in the case that the quorum on an external event can't be achieved.

So with those technological ground rules in place, please help me to enumerate valid uses cases for this new craze.

1. Decentralized crowd funding. This definitely seems to be a valid use case. The funds can be refunded if minimum threshold is not met in time. The funds can be distributed based on milestones which are voted on by the crowd funders.  All these parameters can be preset when the contract is formed.

2. Legal contracts. This only works if the parties can agree on who will vote on the external events that the contract enforces. And the parties could still go to court after the fact if any party felt the contract was not executed faithfully. The restitution from any court decision would come in the form of compelling the parties to do something which the smart contract could no longer enforce. I don't discuss the option of giving courts master keys to override past contract outcomes as this a "can of worms" in many facets.

3. Internet-Of-Things (IoT). This is like Slock.it where we want the contract to control some external devices, such as a paywall for a parking meter. This seems to be a very weak use case, because there is really no advantage at all gained here over simply sending payment to the parking meter API. There is no gains from the oversight of recording the data on a block chain, because there is no way for either party to prove if the service was delivered or not, other than each voting on it and thus they cancel each other's vote out and either they both agree or there is no quorum. IoT is more about block chain performance of instant micropayments, low transaction fees, and cloud databases but not about decentralized consensus on state transitions.

4. Prediction Markets. Such as Augur and Gnosis, the participants to the bet (or all the participants on the network) vote on the external events. This seems to have some seriously bad game theory concerns. Refer to the discussion of game theory issues for DAOs as a hint.

5. Decentralized Autonomous Organizations (DAO). Technically the idea that investors buy a colored coin which enables them to vote on how the funds (denominated in which every token was exchanged for the colored tokens) are spent, and to sell this colored coin at-will on the market. Issues:

• Game theory appears to be insolubly broken in that "No" votes are more expensive/risky than selling your vestment. There doesn't appear to be any remedy because even holding up funds for a grace period doesn't stop the run on the price after the "Yes" on a stupid proposal. However, I thought of a possible mitigation is to limit the value of proposals that can be voted on simultaneously, so that no bad outcome can't drastically impact the price. But this doesn't mitigate the game theory that there is an incentive for those who want to steal the funds to buy up the colored tokens so they can influence the outcome of the votes and those who see it has been infiltrated have more incentive to just sell than to fight, thus the infiltrators get to buy the tokens at cheaper and cheaper prices and yet the funds they control does not diminish in value. The game theory seems insolubly broken.
  
  Eric S. Raymond wrote about the Iron Law of Political Economics, and it is always a power vacuum. When pooling funds, the game theory is a mess.
• Organization is the antithesis of decentralization. Business projects require cohesion and continuity with fluidity of decision making. There is no way to make this into a decentralized structure which doesn't destroy the essence of efficiency of production. Production is highly interactive and collaborative. The time lag in the communication overload of the Mythical Man Month can render a project into gridlock oscillation between competing options. Top-down voting is top-down governance, which is the antithesis of decentralized production. Decentralized version control open source (DVCS) solves this discord to obtain resonance by allowing every participant to have their own perspective on changesets. DAO is entirely wrong model for decentralized production. It fights against everything we learned with decentralized open source development, which is that the individual should be empowered to act independently.
• Note I could envision tracking investment, decentralizing the trading of the shares (colored tokens), voting on a board, and distribution of dividends. But this voting on each proposal as a flat democracy does not work. But then this would model a centralized corporation and thus be subject to investment securities regulation.