Smart contracts, these are not

This is just an excerpt,with some comments of a very interesting article about how little lawmakers know about technology, and software developers about laws and legal systems.

The article I’m talking about is “States that are passing laws to govern smart contracts have no idea what they’re doing”. These are the most interesting parts

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Smart Contracts These Are Not, Yoda says

  • “several states in the US are moving quickly to codify smart contracts into their laws with bills that “seem to be little more than pro-crypto posturing meant to attract investment and entrepreneurs.” (My own comment: why shouldn’t they? Smart contracts are based on the Business Model Of The Year, after all)
  • in general “laws should not attempt to define technologies that do not have a widely held definition in their relevant technical communities”
  • If enough states create differing versions, “it’s just going to be chaos”

and this is the part I personally find more interesting:

“Smart contract” is also a misnomer from a legal perspective - it doesn’t necessarily have anything to do with a legal contract. A smart contract is simply an “if-then” statement that runs on a blockchain. While it’s possible to automate some actions that parties must take under an actual legal contract, like payment obligations that kick in on a certain date, a real contract is “a much more multi-faceted instrument,” says Angela Walch, an associate professor at St. Mary’s School of Law in Texas. For instance, it may include a standard of behavior, like “reasonable” or “in good faith,” that can’t be encoded in software.

Further, highly suggested reading on “Smart Contracts”

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<a href="" target="_blank">Image source: On smart and not-so-smart contracts, (2016)</a>