Contracts, and code complexity

The ability to make commitments - it is also a need to respond on the claims. - Thomas Schelling

Nobody is going to lead, not knowing the business with you, that he will be out, if you start to behave dishonestly. Already 5000 years ago, people have created contracts on clay tablets, to show that they were in support of the king of his innocence in the case of a dispute.

People - the opportunists, and eventually learned to be very crafty. Beginning with the ancient Greeks, particularly nosy people called lawyers (actually, before they were called orators, but essentially it does not change).

Speakers are well paid because the Athenians knew that talented orator - is a huge competitive advantage. If your contractor hired in his defense of Demosthenes, Cicero, without you count it was not for that.

Since then, this law has become an arms race. For example, 40% work in the legal department of Oracle employees, and only because they were sworn friends from Google, Microsoft and other companies do the same. Google spends on lobbying at the federal level of $ 17 million per year. What does this money go? Mainly for patent protection.

As once aptly noted by Karl Marx, wasteful competition.

But competition has an important advantage: it makes it possible evolution. Without competition there would be no natural selection, and we would still be floating in the primordial soup. It is because of the competition we have complex (and nosy!) Organisms. And thanks to millennia exercise insinuations contracts and applicable laws become so complex.

You do not know the rules until you know the exceptions to the rule. In practice, the exception to the rule - the norm.

The fact that the contracts are so complicated, that's good. The complexity makes it very exactly to allocate responsibility and risk between the parties. This makes cooperation more predictable, which allows the parties to invest in more resources to it. For thousands of years, contracts have become much more complex, but no one will argue that they allow much better control risk than clay tablets and the Code of Hammurabi.

As growth rates are rising costs of litigation, and at some point people began to feel that to protect their investments in any business with the help of legal instruments are too expensive. Can I get a predictable risk management in some other way? Perhaps we could make commitments without having to be responsible for any claims? Perhaps obligations could be self-fulfilling?

Smart contracts implement commitments without jeopardizing legal liabilities.

Early smart contracts are not protected by cunning as early clay tablets do not protect against Demosthenes and Cicero - so when some people even having before clay tablets, in no hurry to conclude a contract for large amounts. On the transition from open business partnerships of the Roman Empire to Honor del Bazacle, the first modern corporation with share capital, it took 1,600 years. The Romans had the technology drafting corporate charters on papyrus - which they did not have enough, so it's centuries of experience structuring corporations.

Complexity must be grounded, otherwise it will only confuse rather than clarify the matter. Charter of Honor del Bazacle was difficult because it had been expressed for many years learned the principles of the protection of beneficiaries:

Most of the early financial documents were very brief. Why it took to create the corporation meters tiny text?

...

Corporation - an organization created in order to work independently - perhaps several centuries. Charter of Honor del Bazacle - is something like a complete set of game rules, which are necessary to ensure that no one player is accidentally or deliberately did not ruin the game or deceive other players.

This Bazacle works to this day.

A few weeks ago TheDAO established corporation on a smart-contracts, and some cunning took her fair share of the money. Now its members are calling for a fork, which will cancel this unexpected, but in some predictable results.

I have the DAO tokens, but I speak for the fact that the hacker left that he managed to get. One of the most important properties of a smart contracts - is a predictable risk allocation. About the risk of losing the air I knew about the possibility of external interference nobody warned me.

Ultimately, the decision will be taken Fork Ethereum miners, and this makes them something of a decentralized parliament. But I do not want to serve as a member of parliament - I have no inclination to it, nor the necessary knowledge and skills.

Smart contracts have not been designed for a vote in the court of the tools - this an excellent job, and traditional courts. It was assumed that the smart contracts give the parties an opportunity to trust the mutual obligations, and I want to get what I was promised.