Microblog Memes

And there's a reason smart contracts haven't taken off. Because at the end of the day, people want language in their contracts that protects them from flagrant abuse. And that is not possible with smart contracts.

For example, provisions of contracts can be thrown out in court because they're unconscionable or because they violate various doctrines of fairness or proportionality. If I offer a service, I can put a provision in my service contract that a cancellation fee applies if a client cancels early. But that fee has to be reasonable and proportional. I can't say, "if you cancel your contract early, you owe me $10 million USD." Maybe if that fee was for a hundred million dollar construction project? Maybe. But for a simple consumer service like a plumber or an electrician? No court in the world would uphold such a fee. Contracts can't have language in them that, completely out of the context of the contract, just entitles one party to vastly unreasonable and disproportionate benefit.

The law around real contracts has provisions relating to "unconscionable language" or "a reasonable person." These are things that cannot be defined mathematically. They have to be decided by an actual human being assessing the situation.

And this is also why smart contracts haven't taken off. I don't want to lose my house because some hidden provision of a smart contract flips and now my home belongs to some NFT bro. I don't want my retirement savings disappearing in a puff of logic because of some indecipherable code in a smart contract. I want the contracts governing all the important things in my life to be well-trodden, boring, well-established contracts operating in decades of contract law meant to keep people mostly safe. I don't want whatever snake oil some smart contract coder is trying to sell me. Mandatory binding arbitration is bad enough. The last thing we need is smart contracts.

Sure, someone can try and weasel out of it by saying, "don't like it, don't agree to the smart contract!" To that I say stuff it. We don't let people write language into minor contracts that lets them steal the homes out from little old ladies. We have extensive state regulation of contracts because we've learned the hard way that rigidly enforcing contracts with zero thought or consideration of fairness just ends up rewarding the most vile and wicked people in society.

Yes, it's tempting to do away with lawyers and judges and to replace them all with objective mathematical language. But there's a reason that is never going to happen. People do not want to trust their major financial decisions to some inscrutable code that provides them no legal protections.