Isn't fuzziness a feature of most legal codes? Treating the law like an absolute immutable contract sounds anathema to a healthy judicial system.
I'm not sure why some technologists have such a fascination with legalism.
I'm not against the idea of digital government and having laws be distributed under a free documentation license with the ability for citizens to discuss and amend laws. A standard version control and issue tracker model sounds much more appropriate, however. Perhaps even just email and diffs, so as to have a barrier to entry.
Ethereum is a currency and enforcement system built for computers. Initially, ambiguity isn't a feature because it's meant for contracts and things which are meant to be precise. Room for ambiguity in ethereum can be added later, once computers are intelligent enough to negotiate ambiguity.
The main feature of this system is removing the need for enforcement. Think about how much goes into maintaining police, bounty hunters, debt collection services, reposession services, prisons. In many people's opinions, if enforcing a contract is possible through software rather than physical force, software is always preferable. It brings its own issues of course and isn't instantly perfect, but the possibility of a world with much less need for violence to enforce the law is worth pursuing.
The biggest advantage of this is that it can be completely automated. Corporations can be programmed to run themselves and negotiate enforcable contracts with each other without any human intervention. You could have a personal digital assistant which interacts with other digital assistants to manage your finances and investments, and everything can be enforced by software. As long as enough people are running free software, everyone can share mutually beneficial enhancements to the algorithms which govern their behavior.
You might not want this kind of thing today instead of a trained financial advisor, but 30 years from now, it's likely that software will be better able to make financial decisions than any unaugmented human. Even more important would be movement of commodities around the world between people who need them. Instead of relying on profit-motivated markets to distribute goods, we could have optimal algorithms for moving resources where they're most needed, and enforcement of these agreements will not depend on the strength of a nation's military or economic power but rather smart contracts which are perfectly enforcable whether they belong to a first or third-world nation.
None of this comes free, and there are real challenges to overcome. People will try to exploit them for personal profit. Software will have bugs and make bad decisions. Those are some of the growing pains we'll need to work through to get to a more fair, less violent world.
Yes, there are some things that make me uneasy about this attitude of Ethereum being used as a kind of law. The problem is, traditional law has a some room for the idea of something being "reasonable" or not. I fear it would be quite easy for an disreputable dealer to draw up contracts in code in an obfuscated way, perhaps having hidden subversive behaviour, or clauses that behave in a way different from how a brief inspection would suggest.
This is of course possible in standard law too, hiding clauses in impenetrable legalese. However, in standard law (as far as I know), such tricks don't tend to stand up in court as the behaviour is considered "unreasonable".
Ethereum, being self-enforcing, gives no recourse to victims of tricksters. It's all set in stone.
Good observation. There is a continuum in legal language between expressive power in the natural language and the legal formal language. "Absolute immutable contracts" are however very desirable in many cases where people interact with or through machines. Consider that modern computers, in terms of the hardware are extremely deterministic on a macro level, but a lot of the software is fuzzy (UI).
No, it's a defect. It's probably futile attempting to write "perfect" law, and probably for the best that jurists look to the law's intent rather than always trying to apply the law literally. But how can it be a good thing if people honestly do not and cannot know what is and is not legal?
This is a terrible description of Ethereum and trivializes what it is.
The interesting parts of a contract are not the deadline and the transfer of funds. Even an escrow service can provide those functions.
The interesting parts of the contract are the conditions of the transfer of funds, and how those are evaluated prior to effectuating the transfer, and how the obligations are enforced after the transfer.
What makes Ethereum interesting is that it creates a public, decentralized infrastructure for standardized outsourcing of third-party verifiers for each conditional precursor of a contract, and each subsequent obligation.
A contract can specify a set of payments and deadlines, as in OPs example, but it can also specify Boolean inputs from trusted third-party institutions that provide various named state inputs into the contract.
For example, you could have an input that is Boolean, which says, "Website transferred from Seller to Buyer: Verified by Verisign: True/False", etc. Those conditions can be part of the verification process. AND even more excitingly, small micro payments can be made part of the contract, to the third-party verifiers, as part of the contract itself.
I am kind of sick of people who don't understand what the value of smart contracts is, messing up other people's perception of what it is. I award OP zero points, and may god have mercy on his soul.
Interesting additional context, thank you. If you know a better introduction to the topic, please link&submit it. From what I've seen in other discussions about Ethereum, people are kind of sick of not finding an understandable description about what it actually does except making the world a better place ;)
Smart contracts can define AND ENFORCE the transfer of smart property without intervention. The world of smart property today is limited to digital currency. But if you "skate where the puck is going" it's not hard to imagine other digital goods being smart-property-enabled and eventually physical things like cars, door-locks etc.
A smart contract CAN incorporate a digital sign-off from third party verifiers. But it's not always necessary nor is it a defining feature. God's mercy notwithstanding.
Since people using the network will be in control of constructing their own contracts, they will have an incentive to draft the contract in such a way as to make sure they'll have control over this "outside verifier"; it could even be same company which it chooses to be the "verifier".
> trusted third-party institutions
The defeats the previous attempt at decentralization, by re-centralizing the information the network needs to do it's job.
This is what the network hinges on to gain information about the outside world (and remember, companies will have an incentive to build the contract in such a way to control these trusted third-party institutions as mentioned above).
(I'm aware of schelling coin/contracts; I'm don't think it will work unless it's made a mandatory part of all contracts for all third-party verifiers. For applications that need data that is publicity verifiable, such as the weather or sports outcomes, it could work, but if the information is not is publicity verifiable, e.g. a transaction amongst private parties, I don't see it. And that's only if you force the use of Schelling coin/contracts, which is usually never the first thing Ethereum folks talk about when pitching this; I'm not sure if there are actually plans to implement that.)
I agree, I think the website is failing because it doesn't touch on a key topic, one that you mention: How does Ethereum handle non-blockchain items?
It's easy to see how a blockchain might handle money payments (using its own money system, that is), but far less clear how you can encode contracts for real-world items. Like the example website, for instance. Just because a blockchain entry states 'x' doesn't give it any legal weight, and certainly doesn't transfer real world possessions or ownership.
As you mention, one of the key features is verifiers. Say I am selling a website. We need to ensure that the money transfer happens only once I have control of the site. (and presumably, that the site has been built and is complete). We need a trusted party to check that this is so, and the ethereum contract needs to have this verifier written in to it.
Bitcoin transactions are scripts that execute sequentially and are very restrictive. Ethereum instead took bitcoin and replaced that scripting language with a turing-complete language.
Now, consider the conditional operator in the given example.
"If a transaction occurs.." is the condition. ONLY the conditional of transaction types can be verified by the program because it is inherent in the network. For every other conditional, for example, "if team A wins.." the program has to consult a third-party. These are known as 'oracles' in ethereum lingo.
Now since we are trusting a third-party, why can't we simply use bitcoin and even let the decision script be hosted on the third party?
For the program to be able to take decision on a real-life event, only the occurring of a transaction is the type of event it does not need a third-party for. And trusting is all the problem there is.
*
Bitcoin's script not being turing-complete is a feature because it specializes the use-case. Theoretically, if ethereum allows a turing-complete language to be executed, a code could be written to hack the system itself. Ethereum handles this by executing in a virtual environment.
Thus ethereum is essentially a abstraction on bitcoin and introduction of a new currency token (ether) is unnecessary.
*
The vision of ethereum is very desirable. Although Ethereum does not make it possible I want such a system to exist. My limited understanding is that for a system to exist, we need an algorithm to be able exchange private keys between two parties without trusting each other.
We need a homomorphic secret sharing but without a dealer. In a Blakley scheme, both parties chose their own planes; we need the intersection of planes, the line, to be our private key and for everyone to be able to know the public key for the same without the private key being known to anyone.
Does anyone know of such an algorithm, because solving this problem will also truly decentralise cryptocurrencies like email.
> Now since we are trusting a third-party, why can't we simply use bitcoin and even let the decision script be hosted on the third party?
One reason which springs to mind immediately: the entity running the script always has complete control, whilst we may choose to grant limited control to third parties. For example, we might define a set of separate, potentially independent, verification conditions, and perform some action when 2/3 of those conditions are met. Manipulating such a contract would require collusion by many of those third-parties; and it would also make contracts more robust against technical problems.
Yes, the problem is about not what happens on one machine, but N machines globally. That is a system that scales linearly and does not use proof-of-work. One needs to solve the Byzantine General Problem in a more general way than Bitcoin does.
The example contract is very vague and seemingly pointless. The stated problem is 'if the buyer pays before 1st April, then they own the website'. Fair enough, but usually you'd just deal with this without any kind of contract in place. We don't need contracts for simple cases of 'buyer pays money, gets purchase.'
A contract would only be interesting in the example if it was structured as an option: The buyer has promised to pay for the item by 1st April, and in return, you have promised that you won't sell the item to someone else before then.
How would this be handled? How would be example contract react if you set 'WEBSITE_ADMIN' to someone else prior to the purchase? Does the example contract mean that WEBSITE_ADMIN cannot be altered by anyone else? What are the access controls to this storage slot WEBSITE_ADMIN? Does the seller lose write-access to it after the deal completes? Does the buyer gain read access? If not, what's to stop anyone changing this value and breaking the deal?
The data for WEBSITE_ADMIN is set inside the Ethereum network. I think the term 'website' is tripping people up here. It's actually better defined as 'site with data' which can be accessed via the Ethereum APIs. If you are interested in playing around with the API calls, there is a Docker image for it. I put together a hosted version of this as well, so you don't have install anything to play with it: https://github.com/giantswarm/swarm-ethereum
The example is pseudo-code and assumes a future with smart-property domain registrars. A better example might have been a smart contract trust which is 100% doable today.
There are other examples under the Samples menu at etherscripter.com. Also see ethereum.org.
"You might even imagine a nation defined not by geography but by the rules and benefits of citizenship. Imagine that people of the future could opt-in to the virtual nation that suits them best." . I wonder if we will ever get there . But its eye opening just to think about it.
It may sound good but this doesn't make sense in the real word. Who decides what happens when two persons of two nations have conflicting rights?
Some extreme examples, you may also combine them:
--
Nation A: Copyright is forever. (Because 1000 years is not enough for Mickey Mouse.)
Nation B: No copyright at all.
Nation C: Only Copyleft software.
--
Nation M: No taxes
Nation N: Basic Income for everyone
--
Nation X: Death squads (but only for "bad" people)
Nation Y: No incarcerations, only voluntary "rehab" camps
Nation Z: No incarcerations, only "voluntary" rehab camps
--
The current solution is that each nation has a territory and tanks. With some simplifications, inside each nation there are clear rules and when there is a conflict between nations the one that has more tanks is right. Perhaps this is not the best method, but a virtual nation world will need a realistic method to solve conflicts.
I have proposed this idea in the past as a solution to the problem of stateless prople. If it ever does happen, I want it to be called the Peoples Republic of Hackistan :-)
I am sure I have brought it up here before, but I will again. Here it goes.
My father is an intellectual property attorney. Among colorful clients was a very active entrepeneur/inventor.
One year he insisted the future was a digital nation. You see how people drool or get excited even with 1/4-of-the-way-there e-Estonia system? He was talking about this years ago, when I was finishing high school and starting college.
My father even drafted letters to the UN on his behalf pitching the notion of offciail recognition, and he was laughed off completely.
Mark my words, if govts still antagonize their people and an alternative of this form exists, a vocal minority will popularize the notion.
This is one of the clearest and understandable-without-prior-knowledge descriptions of the project I've seen so far, can anyone familiar with the details weigh in on how accurate it is?
Presumably smart contracts would very often depend on input external to the system - for example, imagine a will that says if Person A dies, Person B inherits the millions of dollars worth of Ether at a particular address that Person A owns.
Somebody (or some other system) has to be in charge of the input to the Ethereum system to tell it that Person A has died. This seems like a huge single point of failure that doesn't exist with current contracts, if it gets hacked then the money gets transferred irreversibly and that's that.
Trying to build a smart contract with any kind of "real world" dependency like this seems equivalent to using a crypto system with an extra key that the government controls, there's a single point of failure that could compromise the whole system.
While I generally agree with your point, it seems to me like that specific scenario could be solved with a dead man's switch contract. Not ideal, but still better than other cases.
I got the impression that the answer you'd get from the Ethereum team is: at the worst case, this is just as bad/good as the current system - i.e. real world effects have to be mediated by an executing authority, same as a real world contract. They would add (and I agree) that smart contracts still have advantages, even in this case.
You can decentralize the reporting of an individual's death using Schelling point consensus, which is what we use to decide Augur's prediction markets on Ethereum. In brief, we distribute a token to a "reporters." At the appropriate time, reporters submit their decisions about events. Reporters who deviate from the consensus lose some of their token balance, which is redistributed to the honest reporters. If an event is ambiguous, reporters report that fact itself instead of guessing at what everyone else will report.
Oracles will be fine for some use cases. Schelling consensus works for others. There are many ways to get real world information into Ethereum, and many ways to reflect how well real world actors adhere to their commitments.
So it's a currency, a contract system, a new form of law, a distributed computing system... I think I need to lie down.
These explainers I keep reading are not helping.
Can anyone tell me whether this is some giant boondoggle circlejerk, or something that is really going to be used widely and perhaps lead to things changing?
If we are being fair here neither does a traditional contract. The enforcement of a that contract falls to person (i.e Policeperson, Bailiff).
The benefit of etherscript in theory at least is that the wording of the contract is unambiguous, with the caveat that there may still be some areas where ambiguity is unavoidable. Which means that in the case of a website a digital bailiff could enforce the transfer. This is a clear benefit in some sense at least. How many times have you read about a court case and been bewildered about how someone could possibly be arguing over something that should be clear cut.
For contracts like a website domain transfer this sounds at least initially doable. What etherscript will have trouble handling is establishing what actually happened. It will undoubtedly be very good at specifying what the outcome of a sequence of events should be but as soon as it hits the real world the problem of establishing what that sequence of events was will still require some form of investigation and enforcement mechanism composed of people and thus there will still be an unavoidable amount of ambiguity there.
Yeah what if the website isn't finished? Does the seller still get paid? I really wonder how they plan on solving conditional logic that depends on programmatic sources.
What happens if you want to change the contract? How do you revoke the previous one? I suppose this would have to be done in a manner that involves both parties, some sort of two part signing process.
What if there's a bug in the contract? The contract then becomes ambiguous and you're left with the same problem.
Not without further integrations, but there are proposals for blockchain-based decentral name resolution etc. Nothing you could directly use right now without a lot of effort around it, but I'm glad they are exploring that space.
I have not seen any clear explanation of how these networks of interacting contracts will be verified, so you know they will work the way you intend. Anyone with any knowledge of the formal verification of software written in Turing-complete languages knows that it is difficult, and it is something that not even many programmers know how to do. Until I see a plausible answer to this question, I have to regard the sort of future presented here as a flight of fantasy.
This will never be unbreakable because no complex system is unbreakable.
The reason contracts are messy is because they're a system that has vulnerabilities. Lawyers are just hackers with different tools and training.
So moving to another system, equally complex or dynamic, will not solve anything in the long run.
A system that must support contracts between humans would be dynamic enough to allow for vulnerabilities that will eventually be discovered.
In fact I find it laughable that these guys are trying to replace a legal system with a computer system. When computer systems get hacked all the time.
Skilled programmers will be hired to write these contracts in a complex and verbose way such that the other party is unable to understand it and may not be able to afford to hire programmers to analyze it. They will then be taken advantage of.
So pretty much the same as the current legal and financial system.
It's very cool that you know exactly what is going to happen. Or, at least, you could simulate exactly what should happen. And, if there was some repository of contracts, you could simulate the effects of the system. Such higher-order possibilities are so opaque most of the time.
But, I'm not sure ambiguity is a bad thing. Or, at least, there is a dose-specific effect. A lot of ambiguity is bad, but so is none. The flexible Goldilocks Zone is the least fragile -- to society that is, not to law.
Smart contracts are one of the worst ideas ever conceived.
Nobody actually wants smart contracts, for excellent and obvious reasons. Nerds think they're a good idea because they'll sort out all the annoying grey areas in social human interaction.
Dr. Strangelove is literally about an unstoppable smart contract going wrong.
No business actually wants smart contracts - they always, always want the option of lawyering out of a bad deal. Or stopping it if the government gets pissed off and says it will penalise you to a crisp if you proceed with that smart-arse contract you just put on the blockchain.
No consumer wants smart contracts, for the same reason "no chargebacks" is a loser. You always want a human to be able to fix the problem.
The only use I can think of for smart contracts is for businesses to screw over customers who have no other option, c.f. mandatory arbitration clauses. Note how the standard example of a smart contract is a car that stops working if your payment fails. Or the Internet fails. Unstoppably. Immune to human intercession, circumstances, etc. (Such locked cars already exist, only bought by people who have no other choice.)
This explanation subtly forgets to explain which agent is responsible for executing the contract-programs. Obviously you don't want the contract to be processed (and the money spent) two or more times at its deadline. Who is doing the processing and ensuring the execution only occurs once?
As far as I understand, it's a distributed consensus system. Scripts don't perform their effects in the "real world"; instead, they append values to a blockchain. External systems can inspect the most recent values in the blockchain and act accordingly. This is how bank accounts work, conceptually.
Many programming courses use bank accounts as examples of race conditions in concurrent systems, eg.
User withdraws £10 from ATM User receives £1000 salary Balance
--------------------------- -------------------------- -------
ATM looks up balance (£100) Bank looks up balance (£100) £100
ATM subtracts £10 from value (£90) Bank adds £1000 to value (£1100) £100
ATM dispenses £10 note Bank sets balance to value (£1100) £1100
ATM sets balance to value (£90) £90
This race condition has blown away the user's salary! However, this is a terrible example, since it is nothing like the actual operation of a bank account!
An account is exactly that: an account (log) of what has happened:
The balance is exactly that: the balance of (difference between) the credits and debits. The balance is derived from the account as needed, taking new entries into account as they get added.
Blockchains are a way to keep such accounts, in a consistent way without giving any one entity control over updates.
For example, the article's Web site ownership system might keep an account with entries like this:
User A transfers example.com to User B
User B sets example.com IP to 123.123.123.123
When contracts are executed, they can inspect the latest values on the blockchain and append alterations. For example, if user B sets up a contract to transfer ownership of example.com to user C, one of the pre-conditions is that user B owns the domain. Hence after execution we get:
User A transfers example.com to User B
User B sets example.com IP to 123.123.123.123
User B transfers example.com to User C
Anyone can execute the same contract on their local copy of the blockchain to get the same result, hence everyone can reach a consensus about what the new blockchain should contain. The contract also can't be run twice in a row, because the resulting blockchain says that User C owns the domain, and hence user B doesn't have permission to transfer it. The same thing happens to any currency which B and C might transfer in exchange for the domain.
To actually use such a value, we can imagine a DNS-like system which resolves names by looking up the latest IP address from the blockchain; in the same way that an ATM displays our current balance by looking at the credits/debits in the account. All of this can also be cached, of course; provided we either trust the cache to provide the right value, or that we don't care enough about the value to verify it ourselves (eg. transactions between third parties which do not affect us).
Perhaps I'm wrong, but the simplest explanation of Ethereum appears to be that it's a way of specifying and sharing contracts.
I think the whole digital currency thing muddies the waters. People, myself included, hear the word currency and think of something we earn and spend, but then you hear about all the other uses of Ethereum and wonder what that has to do with money.
What I've just realised by reading this article is that contracts are what Ethereum is all about, the currency aspect is just one of the many use cases. Laws are another example of a contract. The base class is contracts, everything else is a subclass on top of that.
With most laws, there is the possibility of breaking them and maybe you have to face the consequences.
With this stuff, you won't be able to use the stuff for what it wasn't designed for. Stronger guarantees. It's like a car that slows down in a construction zone, and is unable to go any faster, instead of cops giving tickets. Like the 90 year old engineer guy behind the Venus project says in his interviews.
That can be useful. Not for everything, but for a whole lot. The current DRM stuff works like this.
[+] [-] vezzy-fnord|10 years ago|reply
I'm not sure why some technologists have such a fascination with legalism.
I'm not against the idea of digital government and having laws be distributed under a free documentation license with the ability for citizens to discuss and amend laws. A standard version control and issue tracker model sounds much more appropriate, however. Perhaps even just email and diffs, so as to have a barrier to entry.
[+] [-] ewzimm|10 years ago|reply
The main feature of this system is removing the need for enforcement. Think about how much goes into maintaining police, bounty hunters, debt collection services, reposession services, prisons. In many people's opinions, if enforcing a contract is possible through software rather than physical force, software is always preferable. It brings its own issues of course and isn't instantly perfect, but the possibility of a world with much less need for violence to enforce the law is worth pursuing.
The biggest advantage of this is that it can be completely automated. Corporations can be programmed to run themselves and negotiate enforcable contracts with each other without any human intervention. You could have a personal digital assistant which interacts with other digital assistants to manage your finances and investments, and everything can be enforced by software. As long as enough people are running free software, everyone can share mutually beneficial enhancements to the algorithms which govern their behavior.
You might not want this kind of thing today instead of a trained financial advisor, but 30 years from now, it's likely that software will be better able to make financial decisions than any unaugmented human. Even more important would be movement of commodities around the world between people who need them. Instead of relying on profit-motivated markets to distribute goods, we could have optimal algorithms for moving resources where they're most needed, and enforcement of these agreements will not depend on the strength of a nation's military or economic power but rather smart contracts which are perfectly enforcable whether they belong to a first or third-world nation.
None of this comes free, and there are real challenges to overcome. People will try to exploit them for personal profit. Software will have bugs and make bad decisions. Those are some of the growing pains we'll need to work through to get to a more fair, less violent world.
[+] [-] ris|10 years ago|reply
This is of course possible in standard law too, hiding clauses in impenetrable legalese. However, in standard law (as far as I know), such tricks don't tend to stand up in court as the behaviour is considered "unreasonable".
Ethereum, being self-enforcing, gives no recourse to victims of tricksters. It's all set in stone.
[+] [-] bachback|10 years ago|reply
[+] [-] mode80|10 years ago|reply
[+] [-] gweinberg|10 years ago|reply
[+] [-] TheMagicHorsey|10 years ago|reply
The interesting parts of a contract are not the deadline and the transfer of funds. Even an escrow service can provide those functions.
The interesting parts of the contract are the conditions of the transfer of funds, and how those are evaluated prior to effectuating the transfer, and how the obligations are enforced after the transfer.
What makes Ethereum interesting is that it creates a public, decentralized infrastructure for standardized outsourcing of third-party verifiers for each conditional precursor of a contract, and each subsequent obligation.
A contract can specify a set of payments and deadlines, as in OPs example, but it can also specify Boolean inputs from trusted third-party institutions that provide various named state inputs into the contract.
For example, you could have an input that is Boolean, which says, "Website transferred from Seller to Buyer: Verified by Verisign: True/False", etc. Those conditions can be part of the verification process. AND even more excitingly, small micro payments can be made part of the contract, to the third-party verifiers, as part of the contract itself.
I am kind of sick of people who don't understand what the value of smart contracts is, messing up other people's perception of what it is. I award OP zero points, and may god have mercy on his soul.
[+] [-] detaro|10 years ago|reply
[+] [-] mode80|10 years ago|reply
A smart contract CAN incorporate a digital sign-off from third party verifiers. But it's not always necessary nor is it a defining feature. God's mercy notwithstanding.
[+] [-] platz|10 years ago|reply
Since people using the network will be in control of constructing their own contracts, they will have an incentive to draft the contract in such a way as to make sure they'll have control over this "outside verifier"; it could even be same company which it chooses to be the "verifier".
> trusted third-party institutions
The defeats the previous attempt at decentralization, by re-centralizing the information the network needs to do it's job.
This is what the network hinges on to gain information about the outside world (and remember, companies will have an incentive to build the contract in such a way to control these trusted third-party institutions as mentioned above).
(I'm aware of schelling coin/contracts; I'm don't think it will work unless it's made a mandatory part of all contracts for all third-party verifiers. For applications that need data that is publicity verifiable, such as the weather or sports outcomes, it could work, but if the information is not is publicity verifiable, e.g. a transaction amongst private parties, I don't see it. And that's only if you force the use of Schelling coin/contracts, which is usually never the first thing Ethereum folks talk about when pitching this; I'm not sure if there are actually plans to implement that.)
[+] [-] joosters|10 years ago|reply
It's easy to see how a blockchain might handle money payments (using its own money system, that is), but far less clear how you can encode contracts for real-world items. Like the example website, for instance. Just because a blockchain entry states 'x' doesn't give it any legal weight, and certainly doesn't transfer real world possessions or ownership.
As you mention, one of the key features is verifiers. Say I am selling a website. We need to ensure that the money transfer happens only once I have control of the site. (and presumably, that the site has been built and is complete). We need a trusted party to check that this is so, and the ethereum contract needs to have this verifier written in to it.
[+] [-] kang|10 years ago|reply
Now, consider the conditional operator in the given example.
"If a transaction occurs.." is the condition. ONLY the conditional of transaction types can be verified by the program because it is inherent in the network. For every other conditional, for example, "if team A wins.." the program has to consult a third-party. These are known as 'oracles' in ethereum lingo.
Now since we are trusting a third-party, why can't we simply use bitcoin and even let the decision script be hosted on the third party?
For the program to be able to take decision on a real-life event, only the occurring of a transaction is the type of event it does not need a third-party for. And trusting is all the problem there is.
*
Bitcoin's script not being turing-complete is a feature because it specializes the use-case. Theoretically, if ethereum allows a turing-complete language to be executed, a code could be written to hack the system itself. Ethereum handles this by executing in a virtual environment.
Thus ethereum is essentially a abstraction on bitcoin and introduction of a new currency token (ether) is unnecessary.
*
The vision of ethereum is very desirable. Although Ethereum does not make it possible I want such a system to exist. My limited understanding is that for a system to exist, we need an algorithm to be able exchange private keys between two parties without trusting each other.
We need a homomorphic secret sharing but without a dealer. In a Blakley scheme, both parties chose their own planes; we need the intersection of planes, the line, to be our private key and for everyone to be able to know the public key for the same without the private key being known to anyone.
Does anyone know of such an algorithm, because solving this problem will also truly decentralise cryptocurrencies like email.
[+] [-] chriswarbo|10 years ago|reply
One reason which springs to mind immediately: the entity running the script always has complete control, whilst we may choose to grant limited control to third parties. For example, we might define a set of separate, potentially independent, verification conditions, and perform some action when 2/3 of those conditions are met. Manipulating such a contract would require collusion by many of those third-parties; and it would also make contracts more robust against technical problems.
[+] [-] bachback|10 years ago|reply
[+] [-] joosters|10 years ago|reply
A contract would only be interesting in the example if it was structured as an option: The buyer has promised to pay for the item by 1st April, and in return, you have promised that you won't sell the item to someone else before then.
How would this be handled? How would be example contract react if you set 'WEBSITE_ADMIN' to someone else prior to the purchase? Does the example contract mean that WEBSITE_ADMIN cannot be altered by anyone else? What are the access controls to this storage slot WEBSITE_ADMIN? Does the seller lose write-access to it after the deal completes? Does the buyer gain read access? If not, what's to stop anyone changing this value and breaking the deal?
[+] [-] kordless|10 years ago|reply
[+] [-] heliumcraft|10 years ago|reply
[+] [-] mode80|10 years ago|reply
There are other examples under the Samples menu at etherscripter.com. Also see ethereum.org.
[+] [-] deanstag|10 years ago|reply
[+] [-] gus_massa|10 years ago|reply
Some extreme examples, you may also combine them:
--
Nation A: Copyright is forever. (Because 1000 years is not enough for Mickey Mouse.)
Nation B: No copyright at all.
Nation C: Only Copyleft software.
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Nation M: No taxes
Nation N: Basic Income for everyone
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Nation X: Death squads (but only for "bad" people)
Nation Y: No incarcerations, only voluntary "rehab" camps
Nation Z: No incarcerations, only "voluntary" rehab camps
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The current solution is that each nation has a territory and tanks. With some simplifications, inside each nation there are clear rules and when there is a conflict between nations the one that has more tanks is right. Perhaps this is not the best method, but a virtual nation world will need a realistic method to solve conflicts.
[+] [-] lisper|10 years ago|reply
[+] [-] 616c|10 years ago|reply
My father is an intellectual property attorney. Among colorful clients was a very active entrepeneur/inventor.
One year he insisted the future was a digital nation. You see how people drool or get excited even with 1/4-of-the-way-there e-Estonia system? He was talking about this years ago, when I was finishing high school and starting college.
My father even drafted letters to the UN on his behalf pitching the notion of offciail recognition, and he was laughed off completely.
Mark my words, if govts still antagonize their people and an alternative of this form exists, a vocal minority will popularize the notion.
As an American, I cannot wait.
[+] [-] jsprogrammer|10 years ago|reply
[+] [-] detaro|10 years ago|reply
EDIT: not-so-happy sibling comment: https://news.ycombinator.com/item?id=9987351
[+] [-] dcosson|10 years ago|reply
Somebody (or some other system) has to be in charge of the input to the Ethereum system to tell it that Person A has died. This seems like a huge single point of failure that doesn't exist with current contracts, if it gets hacked then the money gets transferred irreversibly and that's that.
Trying to build a smart contract with any kind of "real world" dependency like this seems equivalent to using a crypto system with an extra key that the government controls, there's a single point of failure that could compromise the whole system.
[+] [-] szx|10 years ago|reply
I got the impression that the answer you'd get from the Ethereum team is: at the worst case, this is just as bad/good as the current system - i.e. real world effects have to be mediated by an executing authority, same as a real world contract. They would add (and I agree) that smart contracts still have advantages, even in this case.
[+] [-] natrius|10 years ago|reply
Oracles will be fine for some use cases. Schelling consensus works for others. There are many ways to get real world information into Ethereum, and many ways to reflect how well real world actors adhere to their commitments.
[+] [-] unknown|10 years ago|reply
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[+] [-] serve_yay|10 years ago|reply
These explainers I keep reading are not helping.
Can anyone tell me whether this is some giant boondoggle circlejerk, or something that is really going to be used widely and perhaps lead to things changing?
[+] [-] zorked|10 years ago|reply
Will a successor of this idea change things? Yes.
[+] [-] fleitz|10 years ago|reply
I think it's more appropriate to say that ethereum is naive
[+] [-] zaphar|10 years ago|reply
The benefit of etherscript in theory at least is that the wording of the contract is unambiguous, with the caveat that there may still be some areas where ambiguity is unavoidable. Which means that in the case of a website a digital bailiff could enforce the transfer. This is a clear benefit in some sense at least. How many times have you read about a court case and been bewildered about how someone could possibly be arguing over something that should be clear cut.
For contracts like a website domain transfer this sounds at least initially doable. What etherscript will have trouble handling is establishing what actually happened. It will undoubtedly be very good at specifying what the outcome of a sequence of events should be but as soon as it hits the real world the problem of establishing what that sequence of events was will still require some form of investigation and enforcement mechanism composed of people and thus there will still be an unavoidable amount of ambiguity there.
[+] [-] boombip|10 years ago|reply
What happens if you want to change the contract? How do you revoke the previous one? I suppose this would have to be done in a manner that involves both parties, some sort of two part signing process.
What if there's a bug in the contract? The contract then becomes ambiguous and you're left with the same problem.
[+] [-] detaro|10 years ago|reply
[+] [-] mannykannot|10 years ago|reply
[+] [-] natch|10 years ago|reply
[+] [-] INTPenis|10 years ago|reply
The reason contracts are messy is because they're a system that has vulnerabilities. Lawyers are just hackers with different tools and training.
So moving to another system, equally complex or dynamic, will not solve anything in the long run.
A system that must support contracts between humans would be dynamic enough to allow for vulnerabilities that will eventually be discovered.
In fact I find it laughable that these guys are trying to replace a legal system with a computer system. When computer systems get hacked all the time.
[+] [-] crucialfelix|10 years ago|reply
So pretty much the same as the current legal and financial system.
[+] [-] pathdependent|10 years ago|reply
But, I'm not sure ambiguity is a bad thing. Or, at least, there is a dose-specific effect. A lot of ambiguity is bad, but so is none. The flexible Goldilocks Zone is the least fragile -- to society that is, not to law.
[+] [-] paulsutter|10 years ago|reply
[+] [-] lukateake|10 years ago|reply
Transactions go live on Monday, if I remember correctly.
[+] [-] davidgerard|10 years ago|reply
Nobody actually wants smart contracts, for excellent and obvious reasons. Nerds think they're a good idea because they'll sort out all the annoying grey areas in social human interaction.
Dr. Strangelove is literally about an unstoppable smart contract going wrong.
No business actually wants smart contracts - they always, always want the option of lawyering out of a bad deal. Or stopping it if the government gets pissed off and says it will penalise you to a crisp if you proceed with that smart-arse contract you just put on the blockchain.
No consumer wants smart contracts, for the same reason "no chargebacks" is a loser. You always want a human to be able to fix the problem.
The only use I can think of for smart contracts is for businesses to screw over customers who have no other option, c.f. mandatory arbitration clauses. Note how the standard example of a smart contract is a car that stops working if your payment fails. Or the Internet fails. Unstoppably. Immune to human intercession, circumstances, etc. (Such locked cars already exist, only bought by people who have no other choice.)
[+] [-] knz42|10 years ago|reply
[+] [-] chriswarbo|10 years ago|reply
Many programming courses use bank accounts as examples of race conditions in concurrent systems, eg.
This race condition has blown away the user's salary! However, this is a terrible example, since it is nothing like the actual operation of a bank account!An account is exactly that: an account (log) of what has happened:
The balance is exactly that: the balance of (difference between) the credits and debits. The balance is derived from the account as needed, taking new entries into account as they get added.Blockchains are a way to keep such accounts, in a consistent way without giving any one entity control over updates.
For example, the article's Web site ownership system might keep an account with entries like this:
When contracts are executed, they can inspect the latest values on the blockchain and append alterations. For example, if user B sets up a contract to transfer ownership of example.com to user C, one of the pre-conditions is that user B owns the domain. Hence after execution we get: Anyone can execute the same contract on their local copy of the blockchain to get the same result, hence everyone can reach a consensus about what the new blockchain should contain. The contract also can't be run twice in a row, because the resulting blockchain says that User C owns the domain, and hence user B doesn't have permission to transfer it. The same thing happens to any currency which B and C might transfer in exchange for the domain.To actually use such a value, we can imagine a DNS-like system which resolves names by looking up the latest IP address from the blockchain; in the same way that an ATM displays our current balance by looking at the credits/debits in the account. All of this can also be cached, of course; provided we either trust the cache to provide the right value, or that we don't care enough about the value to verify it ourselves (eg. transactions between third parties which do not affect us).
[+] [-] termain|10 years ago|reply
[+] [-] unknown|10 years ago|reply
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[+] [-] ZenoArrow|10 years ago|reply
I think the whole digital currency thing muddies the waters. People, myself included, hear the word currency and think of something we earn and spend, but then you hear about all the other uses of Ethereum and wonder what that has to do with money.
What I've just realised by reading this article is that contracts are what Ethereum is all about, the currency aspect is just one of the many use cases. Laws are another example of a contract. The base class is contracts, everything else is a subclass on top of that.
[+] [-] EGreg|10 years ago|reply
With most laws, there is the possibility of breaking them and maybe you have to face the consequences.
With this stuff, you won't be able to use the stuff for what it wasn't designed for. Stronger guarantees. It's like a car that slows down in a construction zone, and is unable to go any faster, instead of cops giving tickets. Like the 90 year old engineer guy behind the Venus project says in his interviews.
That can be useful. Not for everything, but for a whole lot. The current DRM stuff works like this.