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Posted (edited)

 

@Pablo What's going on bro....glad to see that you are back!!! I'm glad that you have decided to take a deeper dive into this topic as there aren't many who have a background in contract law or are willing to explain the complex nature of smart contracts and all of the various legal and regulatory components required to make them viable for use.

21 hours ago, Pablo said:

There is a blind spot for many developers here because the research in the computer science community hasn't joined the dots back to the nature of these so-called "contracts". There simply isn't enough cross-curricular work occurring.

 

Was wondering if you could you expound on what you mean by the bolded sentence above??

21 hours ago, Pablo said:

This is a huge topic but I've started coming around to the conclusion that it requires a form of "judicial" oversight (whether through AI, data analytics or similar) that connects into the ledger and gives contracting parties some element of oversight during the operation of the contract. As a minimum, the system has to allow for the full range of contract principles, remedies and defences as well as protect against malfeasance.

I have been reading up on smart contracts or Ethereum's DAOs lately. With respects to "oversight," what are your thoughts on ownership of the code used within these systems since they are supposed to be, in a sense, self-sustaining/self-ordering etc?? My guess is that ownership of the contract code would be with the originating authors +/- the platform being used (i.e. Codius or Ethereum). Also, how will issues/disputes be handled, let's say due to some faulty or poorly written code, hacks, etc.? As smart contracts begin to really take off, I can envision a future where contract law attorneys who have a C++ programming degree/certificate would be in high demand. 

 

Edited by King34Maine

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Posted (edited)
10 hours ago, King34Maine said:
17 hours ago, Pablo said:

There is a blind spot for many developers here because the research in the computer science community hasn't joined the dots back to the nature of these so-called "contracts". There simply isn't enough cross-curricular work occurring.

Was wondering if you could you expound on what you mean by the bolded sentence above??

I still haven't seen sufficient cross pollination of ideas from the legal community back to the computer science/cryptographic community. There aren't many lawyers who are sufficiently qualified to develop software themselves so there needs to be much more interaction between those 2 groups and it definitely hasn't occurred yet based on the current literature.

Nick Szabo is an interesting exception as he started as a computer scientist who later went into law. I have a double major in maths/cryptography but I went straight into law and never practised as a mathematician or computer scientist. I ended up practising law almost exclusively in the tech industry but that's rare too.

Ultimately, we can't rely on a handful of rare individuals to bridge the 2 fields. We need more collaboration, with much more engagement from the legal fraternity to ensure systems are  built to satisfy the legal requirements, not the other way around. If you look at the development of Solidity and Hyperledger, we don't see many lawyers involved when they should really be front and centre. Software developers and entrepreneurs are essential to start this and build the hype but at some point, they'll need help to make this a reality. That help hasn't arrived yet but it will, don't worry. I jumped most of my legal colleagues but they'll catch up and overtake me soon.

10 hours ago, King34Maine said:

With respects to "oversight," what are your thoughts on ownership of the code used within these systems since they are supposed to be, in a sense, self-sustaining/self-ordering etc?? My guess is that ownership of the contract code would be with the originating authors +/- the platform being used (i.e. Codius or Ethereum)

There are a couple of elements to consider and several layers of rights involved. Here's the short version:

Firstly, I assume by "ownership" you mean "copyright"? For Solidity, that question is probably going to be answered by the GNU Public Licence which means that once the code is made publicly available, it will be open for anyone else to use, modify and adapt. That is already happening today. The underlying Solidity platform and Ethereum ledger has a slightly more complex licensing arrangement and is set out here. That deals with the copyright question.

10 hours ago, King34Maine said:

Also, how will issues/disputes be handled, let's say due to some faulty or poorly written code, hacks, etc.?

Then we have to look at the contract mechanisms/rights embodied by the software. There is still a great deal of uncertainty regarding the legal rights of each contracting party embodied within the code because it has not been adequately tested in the courts (buckle up! :D). At this point, I think the courts would need to look back to the human readable form of the contract (or anything else they can find that represents an agreement between legal persons i.e. not virtual) and determine whether the code adequately reflected the actual agreement/contract. If not, the smart contract would effectively represent a breach of actual contract and the outputs of that code would have to be reversed/modified to reflect the "real" contract.

I think parties will struggle to enforce changes to the code to produce different outcomes so we will end up resolving matters "in-kind" (using traditional contract remedies) until the law has caught up with the technology.

Time for some science fiction: at some point we'll have decentralised courts with AI judges who are authorised to create "micro-forks" of the blockchain to resolve disputes (and I think there will international regulations/protocols that eventually requires all contracts to exist on private channels a la Hyperledger so a fork doesn't disrupt the main ledger). The AI judges will be chosen by consensus models and the jury will consist of a number of trainee judges on the network. The trainees will challenge each other through a series of interacting smart contracts and game theory to be awarded the most "fair-minded" in their decision making over a period of time in order to be elevated to full judge status (which garners them higher fees).

OK, back to reality: the self-sustaining/self-ordering element of smart contracts is likely to become controversial, especially in the context of DAOs and decentralised exchanges. How do you regulate something that doesn't exist, has no single controller, can't be switched off, is protected by cryptography and has global reach? Discuss.

Edited by Pablo

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Yo @Pablo CaligulazBaby here.

195 countries means there are roughly 20,000 corridors of legal jurisdictions to negotiate.  I have some questions about logistics so let's start with land/house ownership.

I believe you need to be Chinese to own property in China, here in the UK you need to pay a special tax if you own 2+ properties however you are exempt from that tax if you spend longer than 6 months out of the country.  Then you have laws for the other 193 countries.

So logistically how will Ripple connect these 20,000 corridors?  My best guess is,

Teams of lawyers from each country will need to sit down individually and agree a standard for land/home ownership transactions when deals are struck between inhabitants of those countries.

Once a framework exists for all 20,000 corridors the code can be written up with as many variables as possible accounted for on Codius.  Perhaps giving all land and housing a special alpha numeric identity and value (in XRP of course!) to sit on the blockchain ready for any future transactions.

I have absolutely no knowledge of law so your opinion will be much appreciated.

 

In Liverpool, it is illegal for a woman to be topless except as a clerk in a tropical fish store.

In the city of York it is legal to murder a Scotsman within the ancient city walls, but only if he is carrying a bow and arrow.

In the UK a pregnant woman can legally relieve herself anywhere she wants, including in a policeman's helmet.

I don't envy the poor lawyers who have to turn the world's laws into a global standard.

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2 hours ago, Ripple-Stiltskin said:

You are? Asked about you yesterday! Why did you leave ( and come back under another name? )

I had lost money trading the XRPUSD market and was made aware of posters reading my XRP TA thread who were making trades based on my views.  I had a very respectable reputation score which could easily be mis-interpreted that I was a very respectable trader so I cut the throat and killed off the account.  It didn't feel great losing a % of my stash and I wouldn't want someone losing a % of theirs because they were confused into thinking I was a good trader.

I was going to leave for good given how diluted the forum has become but there are still a few posters here who can teach me a lot of stuff about my investment for example Pablo, the law and Codius.

Caligula returned to Rome to find a corrupt senate and started executing them and changing things.  He was assassinated and his name smeared in what I consider to be one of the first accounts of how history is written by the victors and how the rich truly hold the power.  I hope Ripple (CaligulazBaby) are more successful.

As for my new username.  I think it explains most investors in the Crypto world lol.

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Posted (edited)
14 minutes ago, fToRrEeEsSt said:

I had lost money trading the XRPUSD market 

We will add +1 to your rep every time you post, to keep you entertained, finding new usernames so you stop trading for a year minimum. :))

Edited by myenglishisbad

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3 hours ago, Ripple-Stiltskin said:

Thanks! Glad you’re back!

Still figuring out your new username, but must be me, lol.

Don't miss the forest for the trees.  Slowpoke.

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Thanks @Pablo for laying out your thoughts and framing the questions.  It's exciting and interesting stuff that I'm not really equipped to add to,  but will watch with great interest.

Off topic...    I was very impressed by exCaliguasBaby above and so I created a thread on that....   

 

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7 hours ago, fToRrEeEsSt said:

Yo @Pablo CaligulazBaby here.

Welcome back comrade! I wasn’t aware you were back and judging by the Zerpening thread yesterday, it will come as a surprise to many others as well. 

7 hours ago, fToRrEeEsSt said:

195 countries means there are roughly 20,000 corridors of legal jurisdictions to negotiate.  I have some questions about logistics

Luckily, we don’t need 20,000 corridors sorted out because the UN and WTO organise multilateral treaties where each country can adopt basic contract principles that (A) recognise contracts (this is under-appreciated by many because we just think contracts exist), (B) set out the basic requirements for those contracts and (C) support their enforcement by the courts of each signatory country. This has already occurred to a large extent for your average contract.

What hasn’t started yet is the conversation about how we recognise smart contracts, what are the conditions of that recognition (see my opening post) and the manner of enforcement. There is a long journey ahead of us on obtaining international agreement although I expect that certain countries will arrange the regulatory frameworks early to try and set the standard. It could be Malta but I suspect not because they do not have any reputation or the intellectual horsepower required to resolve international commercial disputes in the same way Singapore, London or New York have.

7 hours ago, fToRrEeEsSt said:

Teams of lawyers from each country will need to sit down individually and agree a standard for land/home ownership transactions when deals are struck between inhabitants of those countries.

Taking your land/home transaction example, a global trade in land/homes is unlikely to become a use-case for smart contracts because most countries have their own form of land/title registration and the contracts in each country are built around that. Also, many countries prohibit or restrict ownership by foreign nationals (especially here in Australia) based on national security and social cohesion reasons.

Now, if Australia and the 192 other countries of the UN agree to a standard form of home ownership laws and each country drop their restrictions on foreign ownership, we could possibly see a smart contracts become a genuine use-case. But if you think about the politics involved, you may well come to the conclusion (as I have) that the hurdles are too high to make foreign ownership a thing.

For those exceptions where foreign ownership is permitted, this is either permitted under the local law of the location of the house/land or permitted under some type of bilateral agreeement/FTA between the countries of the seller and buyer. Again, no lawyers are required to negotiate standards because that work would have to be done before the sale is even contemplated. At some point, smart contracts may well become part of FTAs and treaties however that is many years away.

For the present time, I think we’ll see each nation-state try to recognise smart contracts within the specifics of their local contract laws, probably in the same way electronic signatures are slowly being recognised. The introduction of electronic signatures is actually a useful guide for how this market will develop - companies such as Docusign and Adobe have spent years developing, marketing and supporting digital signatures but it’s only recently that I’m seeing organisations adopt it and it’s not widespread, even in the tech industry. There’s a cost associated with adopting new technologies so it’s understandable that these things will take time to become standard practice.

Hope I answered your questions.

7 hours ago, fToRrEeEsSt said:

I don't envy the poor lawyers who have to turn the world's laws into a global standard.

You should: we are about to make some serious coin out of this whole damn thing. ;) 

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13 hours ago, Pablo said:

Luckily, we don’t need 20,000 corridors sorted out because the UN and WTO organise multilateral treaties where each country can adopt basic contract principles that (A) recognise contracts (this is under-appreciated by many because we just think contracts exist), (B) set out the basic requirements for those contracts and (C) support their enforcement by the courts of each signatory country. This has already occurred to a large extent for your average contract.

That's awesome, I thought Ripple had the monumental task of connecting the entire planet legally from scratch.

 

13 hours ago, Pablo said:

What hasn’t started yet is the conversation about how we recognise smart contracts, what are the conditions of that recognition (see my opening post) and the manner of enforcement. There is a long journey ahead of us on obtaining international agreement although I expect that certain countries will arrange the regulatory frameworks early to try and set the standard. It could be Malta but I suspect not because they do not have any reputation or the intellectual horsepower required to resolve international commercial disputes in the same way Singapore, London or New York have.

I'm usually able to work out stuff but your opening post has many parts I don't understand because maybe they're law phrases or the such.  Take your first sentence above, I know what the word recognise means in most uses of the word but I don't understand what it means to "recognise a smart contract".  Does that mean recognise the content inside the smart contract?  Recognise it's existence in general as a "thing" and then you say, "what are the conditions of that recognition"....I don't understand what is being recognised, let alone what it's conditions are lol.  Every layer you add from that first bit becomes more complicated to someone who doesn't understand it.

To understand most of what you type I will need to dissect your sentences so I hope you don't mind breaking things down for me?

Ok so what does the word recognise mean? lol.

13 hours ago, Pablo said:

Now, if Australia and the 192 other countries of the UN agree to a standard form of home ownership laws and each country drop their restrictions on foreign ownership, we could possibly see a smart contracts become a genuine use-case. But if you think about the politics involved, you may well come to the conclusion (as I have) that the hurdles are too high to make foreign ownership a thing.

Ye the bit I have highlighted and underlined was the bit I focused on with my original question.  The politics would make it almost impossible imo.

13 hours ago, Pablo said:

For the present time, I think we’ll see each nation-state try to recognise smart contracts within the specifics of their local contract laws

So Ripple aren't responsible for creating a legal framework for each and every contract?

Is it that the service they're providing is that a contract can be put on their block chain securely? 

Does your electronic signature example relates in so much that Ripple are merely providing the capability to store the smart contract securely rather than creating the smart contract itself?  That makes more sense because otherwise that peanut butter is one planck unit thick.

13 hours ago, Pablo said:

Welcome back comrade! I wasn’t aware you were back and judging by the Zerpening thread yesterday, it will come as a surprise to many others as well. 

And cheers bud.  Dare I ask what the Zerpningites were discussing?

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