Smart contract hype vs reality

> Investment banking: In trading and settlement of syndicated loans, corporate clients could benefit from shorter settlement cycles. Rather than the current 20 days or more, smart contracts could bring this down to 6 to 10 days. This could lead to an additional 5% to 6% growth in demand in the future, leading to additional income of between US$2 billion and $7 billion annually. Investment banks in the US and Europe would also see lower operational costs.
> Retail banking: The mortgage loan industry will benefit significantly by adopting smart contracts. Consumers could potentially expect savings of US$480 to US$960 per loan and banks would be able to cut costs in the range of US$3 billion to $11 billion annually by lowering processing costs in the origination process in the US and European markets.
> Insurance: Usage of smart contracts in the personal motor insurance industry alone could result in US$21 billion annual cost savings globally through automation and reduced processing overheads in claims handling. Consumers could also expect lower premiums as insurers potentially pass on a portion of their annual savings to them.

from the capgemini report on smart contracts.

at the high end of their estimates, capgemini expects smart contracts to increase profits across the investment banking, retail banking, and insurance sectors by $39 billion.

the present value of ethereum, a platform for smart contracts, is $46 billion.

the platform for smart contracts is valued more than the total benefit they would provide to firms. let's also not ignore that there are other smart contract platforms out there, so total capitalization is even higher.

what does this mean for ether, link, etc.?

Lawyer here. There is a real issue I see with smart contracts is that a lot of countries (I know of mostly civil law countries) have in their constitutions that you can not, as an individual, take matters into your own hands (I don't know the specific word translation), because the State of Law has the monopoly of institutional violence.

For example, say someone owes you money, you can try to collect your money, but you can't use forceful means to collect it (such as freezing their bank accounts, or taking their stuff and pawning). As a citizen, you have to go ask the State, through a judicial petition, so it can force the other party to give you what is rightfully yours.

I was talking to a contract law in my country about smart contracts, and how they will make lawyers obsolete, and he made an interesting point that since the contract executes itself and forces the person to give the money, willingly or not, it can be seem as taking the matters into your own hands, and, therefore, is not allowed by the constitution.

I'm not saying it can not be viewed from a different perspective, but a lot of countries are gonna have intense legal debates about smart contracts and if they are constitutional or not (and since it will affect lawyers the most, they will fight it the hardest).

Also, it's hard for law operators to comprehend the clauses, if they are written in code, even if the programmer says they are exactly as the lawyer describes it, the lawyer has no way to check for himself (unless he too knows code, which I think will be a necessity for the career in the future), and in some countries lawyers are the ones accountable, by law, for contractual errors.

So, smart contracts are amazing, but they will face a lot of legal problems in some countries, and a lot of legislation, or constitutional amendments may be needed, to fit them in the State of Law of every country.

Or maybe not, I don't know.

>I was talking to a contract law in my country about smart contracts, and how they will make lawyers obsolete, and he made an interesting point that since the contract executes itself and forces the person to give the money, willingly or not, it can be seem as taking the matters into your own hands, and, therefore, is not allowed by the constitution.
lol kiss my ass, gubberment. im sick of this shit

need a sophisticated parser that can transcode legalese into solidity

hang yourself faggot before you get outsourced by a shitcoin

>since the contract executes itself and forces the person to give the money, willingly or not, it can be seem as taking the matters into your own hands
So pretty much the plot for Metal Gear Solid: Peace Walker?

It means 120bn ETH soon

>comparing annual savings the technology might provide to the total market cap of a coin.

this kind of uphill resistance is why i expect this kinda stuff to take over
only the things having the most potential, will face the most resistance

but the way i see it- smart contracts will not need any force to complete, since not completing the contract on side B protects side A from the failure of side B

god only knows, tho

Some stuff is actually impossible, smart contracts will replace simpler, more objective contracts, but not the ones that contain a subjective perspective.

For example, how can a smart contract verify if the parties tried to exercise their "best efforts" to perform their contractual obligations?

>will not need any force to complete

That's precisely why they may be inconstitutional, from some perspectives (although I don't agree with it personally, I think they can fit in some kind of new category, but other lawyers may disagree).

Although yeah, I love creatively destructive technology, everything that disturbs the status quo is cool, which is why we all like crypto so much.

have smart contracts move money into an escrow after a trigger, leaving the funds in escrow subject to intervention by an arbiter. if no arbitration attempt within a certain amount of time, release the escrow again via smart contract

Some lawyer somewhere thinks contracts rely on constitutional status, for some reason. Ignoring the fact a contract has existed long before any modern constitution. Also ignoring the fact that constitutions limit state powers and have virtually nothing to do with how citizens do business.

Tldr; inane bullshit

t. Lawyer

but you're equivocating the projected increased profits in these sectors with the totality of ethereum profitable capabilities. but these sectors that can be streamlined and made more efficient/profitable are only a few of many sectors smart contracts disrupt, not to mention new economies that will be created around this technology and legacy institutions that will be outright destroyed by it.

by that alone, ethereum is extremely undervalued.

>he does not know of the social function of the contract

You are probably from a common law country, pacta sunt servanda is indeed much stronger in those places, but surely it still must follow the constitution, no?

That actually solves it, but then it also means that smart contracts need arbiters to reach it's full potential, some countries don't have that yet (or decided against it), just the regular judicial system.

Just reiterating, I like smart contracts, but it is undeniable they will face a lot of legal controversy from every country, before they are adopted.

undoubtedly

Legalese is so difficult because lawyers make it so. The point of this artificial difficulty is to make themselves, as experts, indispensable.
>t. guy with a lawyer friend whose boss makes him rewrite contracts occasionally because "not abstruse enough".

That's true hahahah

But some of it is indeed necessary.

>a project valued at $46 billion stands to save banks and consumers $39 billion a year
>every year, forever

sounds like it's UNDERvalued by 100x if that's the case.

>lawyer taking instruction from the boss and not the client

Your boss is asking your friend to break the law. Your friend is probably bullshitting you.

By putting SMART targets in place, as any well written contract would do.