Just because some subsets of the crypto industry want to operate entirely outside the law doesn't mean the whole industry wants to operate outside the law. As evidenced by anyone who pays taxes on their crypto.
Saying "he used the system as it was designed, even if not as intended" is more or less equivalent to saying that any computer hack or zero day is also "using the computer system as designed".
You even plausibly extend that to picking locks in the physical world.
So yes, it does make sense for the law to get involved.
If a smart contract requires a court to execute you really should have just used a regular contract no?
No. Definitely not.
Smart contracts are supposed to eliminate a huge swath of disputes, so often people don’t need courts at all. People can put business rules in place that aren’t violated - and not just for contracts.
For example bidders at Christie’s and Sotheby’s sometimes don’t have the money but the houses can’t make a big scandal. They try to hold another auction and sell it to someone else as if the guy sold it.
In crypto it would be trivial to endure bidders have put up the money. You can refund the lowest bidder below N winners. You can also ensure payouts happen at agreed-upon rates. You can prove escrow. And stuff like that.
Imagine a bunch of donors or investors seeing how their money is spent because it is on the blockchain. Or imagine a community having roles and knowing that each role was granted properly.
In web2 anyone who can get into the database can modify any records and then you hope court cases and chilling effects will undo the damage retroactively.
>Smart contracts are supposed to eliminate a huge swath of disputes, so often people don’t need courts at all
That just sounds like near total agreement with me.
Dont get me wrong, I love smart contracts conceptually. But if the parties to a smart contract desired court arbitration, they should include a function for it in the smart contract. Like a swing vote for a trusted third parties keys.
Without that, to me, you are signalling acceptance of the outcome of the code without arbitration. If you seek a court to interfere with the execution of a smart contract that never included a provision for arbitration then you are in my mind, as guilty of ignoring the intent of the smart contract as any hacker might be.
And if you were just going to court to dispute the smart contract, you may as well just have accepted a legacy contract. Escrow, multiple parties, etc etc all solved problems in the traditional legal space.
The key is that the smart contract framework introduces a feature that is used let’s say 2% of the time.
So I disagree even if you used that feature of the framework, that you “may as well have used a non smart contract”.
> In crypto it would be trivial to endure bidders have put up the money.
And also not in crypto, as has been done for thousands of years
Smart contracts give you a lot of financial automation and guarantees that regular courts do not. Furthermore, any litigation or arbitration in court is very expensive. If you can use smart contracts to simultaneously increase the complexity and sophistication of your transactions while also reducing the number of times you need to go to court, you've created value.
And, a lot of crypto projects do pair their smart contracts with regular contracts, or at the very least with ToS
It seems more like a contract dispute to me. My first thought is that a commercial court could decide who keeps the money.
(Clearly in the real world the American authorities have decided it's a criminal matter. I just find it odd that a "smart contract" dispute falls under criminal rather than commercial law.)