As a foreword, yes I am very aware of resources like https://web3isgoinggreat.com You don’t need to spam the comments with the link.
I am not asking about your general opinions on why crypto kittens is a jerk fest for crypto bros. Please cut the automatic generic rant on why cryptocurrencies is the sandbox of brainless dopamine monkeys. I am asking about your sentiment on a specific scenario, that tries to solve a real problem.
This is just an example, for oversimplification.
In a trust-less environment, one person shares some of their cloud space for a fixed amount of time, with another person they don’t know much.
The person asking for the cloud space, promises that they will use it only for X,Y or Z. They both agree to leave all the data in clear text (it is easy to prove whether there has been a breach of trust).
If the person doesn’t respect their engagement, they must be penalized. In this scenario, there is no legal tool to ensure this.
Enters the smart contract. The individual asking for a share of the cloud space, deposits a certain amount of ETH in a smart contract. The smart contract itself ensures that the owner of the cloud space will NEVER have access to the deposit fund.
Both individuals sign the smart contract. After a fixed amount of time, the depositor can retrieve their deposit back.
However, if for somewhat reason the depositor breaks their engagement (and do something outside X,Y, Z), the person sharing their cloud space can refuse the refund of the deposit.
Both individuals must then reach a consensus, or the deposit will stay frozen on the smart contract forever.
In this case, would the use of a smart contract be a reasonable solution to you?
usually smart contracts like this rely on other things that exist on the blockchain: transferring ownership of something, etc… this way, the smart contract can release funds to the specified parties under provable conditions
these “things” that exist on the blockchain are sometimes representations of ownership (think like a deed for property: it’s just a piece of paper that represents ownership. that could easily exist on the blockchain, where the owner of the property is the person who is assigned the deed on-chain)… the you can have a smart contract that automatically releases funds to the seller once the deed has been transferred to the buyer
there are also things called “oracles”, who are independent, trusted (or sometimes not so independent or trusted; you have to be careful!) third parties who write information to the blockchain… in this case, say for example you make a bet with someone that the global average temperature goes above a certain point between block A and block B: there’s an oracle that just writes the daily global average temperature to the chain. you both deposit into a smart contract that specifies the rules and reads the temperature from the oracle, then distributes based on the results… this situation is less ideal, because it relies on trusting a 3rd party in several ways, however it’s worth mentioning because many people see this as equivalent to the former situation when it’s really not
The idea that property can be accurately recorded on a neutral blockchain is absolutely ludicrous. What happens when the owner of the property dies and they are unable to update the record? What if there is a dispute among the heirs? What if the owner goes bankrupt and their assets are seized by a third-party, but they are still unwilling to update the blockchain record? There is a reason that definitive records for real property are maintained by the government itself. Anything of real value must exist within a legal framework and be subject to a change of ownership under law or court order.
If a judge determines a property belongs to someone else, the sheriff who comes to evict you isn’t going to care when you point to some record on a blockchain. If a blockchain record can’t be unilaterally updated by the government to change ownership, against the wishes of the current owner, then it cannot function as a true record. Consequently, any “smart” contract based on that record is unreliable as well since the seller may not actually own in the real world the thing their blockchain deed says they own.
smart contracts are turing complete… you can allow anyone you like to transfer ownership (including various government departments)… the point of a smart contract isn’t that only a single entity can definitively take action; it’s that all possible actions are expressed as code and queryable by other contracts
you’re totally right that right now smart contracts mean nothing, however we’re talking theoretical applications of a technology