I mean, having a deed of owning some property on the blockchain is all cool and dandy. Provided that the polity where the property is located recognizes this. Otherwise you're still trespassing.
As someone who has been through this exact thing, it sucks, but it is possible in the current court systems. Courts have complicated "Discovery" processes explicitly for this reason: to find out not just the immediate problem (a bankrupt builder or a builder who would be bankrupt by the end of the court case), but the supply lines (what other warranties apply?) and the creditors (where is the bankrupt company's money going?).
A human run court is allowed to state "this bankruptcy looks fishy for this reason, and these people are owed damages, and some of the money that moved on already to these creditors is by rights should be paid for damages to these people". It's definitely not fun to be involved in such court proceedings, and it is and likely always be an inefficient human process, but it is a process as a society we've built to be mostly very trustworthy. A jury of peers to decide if damages are warranted in the first place; a human judge with reasoning to say "this shell company is bankrupt, but these other companies can and should pay, maybe with the money they took from this shell company" or "this shell company is bankrupt but some of this still applies to the warranty insurance product they purchased and the insurance provider needs to pay up even though their client is bankrupt".
It doesn't always work right/decide in your favor, and it is slow and expensive, but "smart contracts" offer no better and often a lot worse processes. A "smart contract" can't route around a shell company/wallet. A "smart contract" likely can't discover that other warranties may have applied or other insurance products existed (and if it can it's in a programming class all its own and likely a one off you can't expect to exist in general or to work if you need to actually rely on it).
There’s problems with that particular mechanism, but in general if contracts can automatically decrease someone’s money, reputation, access etc, they can do enforcement.
This is part of the smart contract, which has to explicitly define the conditions on which the collateral is confiscated.
Getting real life data reliably into the blockchain is hard, but there are different approaches to solve this.
A more practical approach is to transfer the funds to Bob once he clicks on the checkbox and have some lock-up period, so that Alice has the opportunity to trigger a dispute if she needs to.
Then the dispute can be resolved by a private court (composed of humans) that both Alice and Bob agreed on beforehand. See: https://kleros.io
You don't have to trust the escrow holder, you don't have to worry about getting banned from Ebay.
The human judges/arbitrators aren’t, and they’re what’s critical. The contract cannot be sensibly completed without their input.
So you have an escrow system where human judges need to supply critical information. I’m left having to trust the human judges, unsurprisingly. Running this basic escrow code on the blockchain means that I no longer have to trust the kind of basic escrow code that’s used in centralised escrows. My question now is whether the escrow code of centralised providers (if condition then funds.release()) is really so unreliable that I’ll get get tonnes of benefit using blockchain escrows. Whenever there’s controversy over escrows, it comes down to the arbitration, which as you admitted would still be performed by humans.
Yes, it means that you will 100% know that the escrow website is not gambling your money away, that it won't out of the blue ask you to supply more documents when it finally comes the time for you to get paid, it means that the escrow won't get hacked and your PII won't be sold on darknet.
Smart contracts are just a simpler and more transparent way to deal with finance.
no, you won't
> Smart contracts are just a simpler and more transparent way to deal with finance.
no, they aren't
who's the one looking for miracles here?
the only thing you can be "100% sure" is that we're all going to die.
the second one is that cults will try to convince other people that they are the only true cult.
what's stopping him now?
> without having to deal with intermediaries and bureaucracy.
you mean laws?
edit: immagine this situation, Bob does the job, the other party never clicks on "done", Bob doesn't get the money, what Bob can do if there's no intermediary and/or bureaucracy protecting him?
> immagine this situation, Bob does the job, the other party never clicks on "done", Bob doesn't get the money, what Bob can do if there's no intermediary and/or bureaucracy protecting him?
As I said, there is a period of funds lock-up. In the worst case, Bob has to wait some time until the smart contract sends him his payment.
and your virtual ideology is better, how?
since nobody can enforce anything.
> As I said, there is a period of funds lock-up. In the worst case, Bob has to wait some time until the smart contract sends him his payment.
What if they payment is never sent and "some time" is forever?
You need laws after all (AKA a solution outside of the chain, or a deus ex machina if you want)
If I was Bob I would not see this thing you're talking about like a great advancement and would continue doing my job like I do it now.
I mean, I get you watched a lot of fiction and wanna feel like living as an outlaw, but even outlaws have laws and follow some of them.
You are trading mid to low trust in your local community for zero trust to some entity you'll never know, who'll never know you, couldn't care less about you and respecting the terms of some virtual contract and pretend we all should do the same.
Do you understand that this is the exact definition of "out of touch"?
The article said the neighbours first vote that work is done. Most of the time that could work. But it also mentions the neighbours could collude to steal the collateral. In that case courts could get involved and force money be returned etc.
I’m very far from a legal expert, but smart contracts seem like a potentially useful tool, within the current system. Not as a complete replacement.
So, it's the government enforcing the contract.
EDIT: Just wanted to add that I actually completely agree with your last sentence!
What happens next?
They don't use PoW or PoS. Instead they run on centralized servers like traditional databases. Only, they run on 10 or 20 or 50 centralized servers run by different people and processing the same input and cross-checking each other. Anybody who has money on the chain can stake it to vote for one of the servers (so I guess it is PoS really). Although anyone can connect to the chain and process input, the N servers with the highest stake-votes are the ones that actually count. Also the server owner has to put up some crazy collateral (currently in the realm of $500,000 I think, this is determined by market mechanisms, it used to be lower) and if they are caught cheating they lose it, a process called "slashing". Even having your server go down can cause you to lose some collateral. Conversely you earn collateral while it is up (like in PoS).
So it's really a lot like a traditional database cluster with an enforcement mechanism, and that enforcement mechanism makes all the difference unless your attacker has millions of dollars to waste.
So only the people with money can participate?
No, they cannot. They can reduce these values, but that by itself doesn't enforce anything in the real world. If the entitiy doesn't care about these values (for example because it was a fake account/identity/whatever) then the only enforcement can come from outside.
That's why the word "force" is in "enforcement". States work because, among other things, they ultimately have a monopoly on the application of force.