Ethereum Needs Legal Contracts

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Daniel Cawrey, Velocity responsible for communications, derivative project that uses smart contracts blockchain-based in Ethereum, he discusses the recent disappearance of the DAO, and how that affects the smart contracts future. According to Cawrey “both things that should be known is that the contracts are “stupid” and are not contracts”.

It is necessary to create clear rules when it comes of smart contracts and they are already being built in Ethereum, the debate is necessary, the community wishing to advance in the improvement of its technology and the structure of Government should promote them, to support the objectives of employers and users.

It should not be forgotten that since the invention of the computers, hackers and attackers have always wanted to penetrate into systems through exploitation of their codes. The DAO attack  is a vulnerability and weaknesses test in the Ethereum code or script language that could discourage new projects.

That’s why 3.6 Ether million were taken from the DAO, with an approximate value of 50 million dollars, instead of a robbery, it can be seen as the exhibition of the Ethereum code, which shows that it is not ready yet to put it into production. In fact, since the attack, numerous items of information exhibit defects in Ethereum and to its language programming lack it strength.

It is previously Mentioned in terms of its shortcomings, demonstrates that there is much to be done, in relation to Ethereum smart contracts to make them safer, this requires efforts of the community and a more immediate decision whether Blockchain be mobilized as part of an effort to recover the stolen funds. As an example, the Ethereum smart contract code was designed to remain immutable, it means unchanged. This makes the system difficult, but not impossible when it comes of an upgrade code.

That must remain immutable, it makes sense, and contractual agreements signed after may not be simply revoked. However, Software systems are updated all the time. This dichotomy is perhaps the main reason why almost 20 years after that Nick Szabo proposed for the first time the idea of smart contract, up to this date have not been implemented in the existing legal system.

In law, the terms described in no clear way (lagoons), it is often in the agreements, which are then exploited when there are divergences. This is not unlike what has happened in DAO, so it must be careful to create smart contracts.

It affirms “the code is the law”, that sounds like a great catchword until show up to defects, found in what it is clear, is that smart contracts are simple smart contracts, ideals, because to the design of Ethereum, the construction of governance automated in the way that DAO wanted looks great on the character, it gives the impression which is good with minor contracts, instead of a big contract with lots of money.

References: coindesk.com

Disclaimer: This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the infocoin views, and should not be attributed to Infocoin.

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3 Responses

  1. Cynthia says:

    I wrote a piece recently about the legal/contractual issues as they related to a prenuptial smart contract in Ethereum. Please check it out and let me know what you think.

  2. Uno Hansson says:

    In Swengelsk language:
    “the code is the law” until en opinion som bedömer att så inte är fallet… sedan är det kodutvecklarna som bestämmer – via feedback – att ta risken att försöka rätta till koden… och då är det upp till beslutarna enligt kodkontraktet att genomföra the fork eller inte. Det behövs alltså inga korumperade och kontaminerade beslut från några regeringar eller FN… elller?

  3. Uno Hansson says:

    … om att ta risken att rätta till eller inte…

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