{"id":1178,"date":"2019-02-04T14:42:12","date_gmt":"2019-02-04T14:42:12","guid":{"rendered":"https:\/\/blockchain-society.science\/?p=1178"},"modified":"2019-02-04T14:42:12","modified_gmt":"2019-02-04T14:42:12","slug":"the-stakes-of-smart-contracts-by-mark-verstraete-ssrn","status":"publish","type":"post","link":"https:\/\/blockchain-society.science\/?p=1178","title":{"rendered":"The Stakes of Smart Contracts by Mark Verstraete :: SSRN"},"content":{"rendered":"<blockquote><p>By consensus, smart contracts are a revolution in private ordering: they offer guaranteed enforcement, independent of the whims of territorial governments; efficient formation and interpretation; immunity from external interference; and complete deference to the parties\u2019 wishes. Each of these claims is a myth. While smart contracts present themselves as natural and neutral, they are in fact deeply politicized. The Legal Realists tore down the foundations of smart contracts almost a century ago. Advocates for them have not solved the problems of the past\u2014they have forgotten them.This Article offers a new critique of the optimism about smart contracts and desirability of securing mutual agreements by code rather than law. More specifically, this Article takes aim at the assertion that smart contracts can, and should, provide an alternative to traditional contract law. It contends that advocates for smart contracts rely reflexively on deeply contested assumptions from Lochner-era legal thought, including a political commitment to \u201cfreedom of contract,\u201d insistence on a division between \u201cpublic\u201d and \u201cprivate\u201d spheres, and a minimalist view of the state\u2019s role in managing private law systems of contract and property. More specifically, these assumptions cause smart contract partisans to fundamentally underestimate the role of the state in maintaining a functioning private law regime. This failure to recognize the inevitable extent of state intervention in private law means that smart contracts will create novel distributions of wealth and power that are normatively suspect.Furthermore, this Article draws upon two foundational moments in Internet law\u2014early hopes for a realm beyond territorial governance, and attempts to override copyright law through technology\u2014to demonstrate the errors that advocates and scholars alike commit based on the evanescent technology promise of this new method. Finally, this Article demonstrates that, far from realizing a utilitarian ideal of efficiency, smart contracts are constructed without democratic oversight and governance, which are essential for a legitimate system of private law.Keywords: contracts, legal theory, private law, private law theory, Lochner, smart contracts, law and technology, blockchain, Legal Realism, private order<\/p><\/blockquote>\n<p>Source: <em><a href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=3178393\">The Stakes of Smart Contracts by Mark Verstraete :: SSRN<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By consensus, smart contracts are a revolution in private ordering: they offer guaranteed enforcement, independent of the whims of territorial governments; efficient formation and interpretation; immunity from external interference; and complete deference to the parties\u2019 wishes. Each of these claims is a myth. While smart contracts present themselves as natural and neutral, they are in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[42,26,5,28],"tags":[],"_links":{"self":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/1178"}],"collection":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1178"}],"version-history":[{"count":1,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/1178\/revisions"}],"predecessor-version":[{"id":1179,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/1178\/revisions\/1179"}],"wp:attachment":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}