> There's no technical utopia that will replace 'integrity'. Or frankly 'values'.

This is so important.

If someone is trustworthy, you need fewer checks in balances to be able to be confident that transactions with them will go well.

If, on the other hand, someone is not trustworthy, all the systems in the world cannot guarantee good outcomes.

In addition to not being fully effective and implicitly labeling[0] participants as untrustworthy, a system that forces everyone to play by the rules without removing the factors that make people abuse the system in the first place only makes the abuse more attractive, consequential and inevitable. The most attractive position in such a reality would of course be the position of those who set the rules (I suspect the field in question is bustling in part because many see themselves within that elite, if only they could make this future come true)—and, of course, the rule-setters are never immune to the motivation for abuse either (only they may get away without it being labeled as such).

On the other hand, if those factors are addressed, an intricate system of verifications and hash checks is just unnecessary friction and a source of added complexity to maintain.

[0] https://en.m.wikipedia.org/wiki/Labeling_theory

Ethereum contracts 'enforce' integrity the same way (but better) as escrowed down payments on housing purchases 'enforce' integrity - they allow a consequence if one or both parties do not fulfill the terms. They can also automate the financial transaction. Why anyone would read more into it than that is beyond me. These are not meant to replace laws or writ.

> But even that would be besides the point: It's not the 'legal system' that makes things work, it's the integrity of the system overall, maintained by a 'legal system'. Canada isn't rich because it has a 'legal system' - that's just one component. It's rich because people and groups act with integrity. The 'law' is involved very rarely.

You have flipped the direction of the causal arrow here.

The existence of functioning and accessible court systems in the western world is one of the reasons that western societies have higher levels of trust—not the other way around. It's much easier to trust someone when you know that if they cheat you, you have recourse to pursue justice in the courts.

In my experience doing business in both developed countries and less-developed countries, there isn't much difference with regards to individual human beings' "integrity". In fact, in countries without functioning judicial systems, business owners might demonstrate more "integrity" toward their customers, vendors and partners than we see in the US—but this has more to do with incentives than it has to do with people's character. In countries without functioning and accessible judicial systems, people typically do business with people that they have done business with before, because doing business with strangers is so risky. Reputation matters a bit more.

> There's no technical utopia that will replace 'integrity'. Or frankly 'values'.

Yes, as a general matter, many of the problems that exist in the less-developed world originate from deficiencies of trust [0]. But again, this is largely attributable to there not being reliable ways for people in those societies to mediate disputes.

This isn't about utopia. If smart contracts can take the place of functioning court systems in commercial transactions—or at least can reduce the complexity of legal disputes and narrow the discretion of judges to influence dispute outcomes—a real problem is solved and an impediment standing in the way of economic development is removed.

Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives.

[0] https://www.bi.team/blogs/social-trust-is-one-of-the-most-im...

No, integrity was there before the legal system.

My grandfather used to do business out of his wallet with cash and handshakes. He would do deals with farmers to make things in his workshop, and then get paid in pigs/parts of cows 6 months later. Farmers in particular are extremely reliable and credible people.

People in agrarian areas didn't move around much and personal integrity was definitely a kind of currency.

When you're dealing with industrial level trade and commerce, esp. with far flung traders and investors - yes, you're right.

And you're right to point out the relationship on some level.

But ultimately, Crypto is not going to add integrity to the system, and, integrity is essential.

"Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives."

No - they do not.

The naming of these things are a total misrepresentation.

Contracts can only exist within the context of a Judical system, otherwise, they're not really contracts.

No businesses on planet earth are going to allow their businesses to be managed outside the auspices of some kind of judicial oversight, and especially not in things that cannot be undone.

The world is full of accidents, misinterpretations.

Every situation we see a 'smart contract' there is probably room for a market maker, and/or just some kind of simple software that 'implements' a regular contact.

> My grandfather used to do business out of his wallet with cash and handshakes. He would do deals with farmers to make things in his workshop, and then get paid in pigs/parts of cows 6 months later. Farmers in particular are extremely reliable and credible people.

You don't think that this kind of trust exists outside of the developed world? Why do you think that your grandfather's experience is unique, compared to small farming communities anywhere else in the world where people have already known each other and done business with each other for many years?

> When you're dealing with industrial level trade and commerce, esp. with far flung traders and investors - yes, you're right. And you're right to point out the relationship on some level. But ultimately, Crypto is not going to add integrity to the system, and, integrity is essential.

The argument I am making is that at the industrial level, the existence of institutions capable of mediating disputes and enforcing agreements paradoxically increase levels of trust within society as a whole by reducing the need for counter-parties to depend on each other's personal integrity.

Of course personal integrity is important in business! But it is not a difference in integrity between societies that explains differences in development. Rather, differences in development can be largely explained by different levels of trust, which are a function of the tools and mechanisms available to mediate disputes. You are going to trust people more if you believe that cheaters will be penalized somehow for their cheating.

In traditional societies, cheating is punished by repetitional mechanisms within the community. The courts have served this function in modern industrial societies, and have thereby facilitated industrialization at a massive scale. Smart contracts can serve a similar purpose in places where courts are unavailable or cannot be relied upon today.

> "Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives."

> No - they do not.

> No businesses on planet earth are going to allow their businesses to be managed outside the auspices of some kind of judicial oversight, and especially not in things that cannot be undone.

In some circumstances, it is better to have the option of taking a dispute to court. But even today in the US, most businesses try to avoid the courts and instead use arbitration to resolve disputes. In most of the third world, neither arbitration nor the government court system are available to most businesses.

Around the world, I think there are a lot of businesses that would prefer to completely eliminate the kinds of ambiguities in paper contracts that lead to disputes, by opting instead to use a smart contract to specify the mechanism of a transaction. If you don't see it being done already, that is because there is still a lot of infrastructure that needs to be built out.

> The world is full of accidents, misinterpretations.

> Every situation we see a 'smart contract' there is probably room for a market maker, and/or just some kind of simple software that 'implements' a regular contact.

Smart contracts are interpreted by machines, so there is no misinterpretation—if there is a problem, it is a problem with the implementation.

Sure, you could delegate the responsibility of encoding the terms of a paper contract to some third party. But then all parties need to agree on and trust that third party, and the third party itself needs to agree and accept some risk. A smart contract is a better solution because there is no third party involved. Everyone gets to read the smart contract before the transaction is performed, and if all agree, the terms are set.

> You don't think that this kind of trust exists outside of the developed world? Why do you think that your grandfather's experience is unique, compared to small farming communities anywhere else in the world where people have already known each other and done business with each other for many years?

You just wrote that trust is thanks to judicial system and that's what GP countered based on personal experience.

> You are going to trust people more if you believe that cheaters will be penalized somehow for their cheating.

Indeed. That's what we have with judicial system. And the opposite is true too, if cheating is not penalized if it was due to a maliciously crafted smart contract (because smart contact would be king) then I sure am going to trust everyone and everything much less.

> You just wrote that trust is thanks to judicial system and that's what GP countered based on personal experience.

I think both jollybean and I are drawing a distinction between traditional societies where high trust primarily exists within smaller communities, and industrial societies where trust operates at scale. I don't disagree with jollybean regarding how trust operates within smaller traditional communities.

My point was that at the level of industrial societies with millions of people doing business with each other, high trust is maintained largely because of the existence and functioning of the judicial system, not due to some unique personality characteristic of the individuals living in that society. Smart contracts can serve a similar functional purpose in societies where ordinary people do not have access to a functioning judicial system.

> And the opposite is true too, if cheating is not penalized if it was due to a maliciously crafted smart contract (because smart contact would be king) then I sure am going to trust everyone and everything much less.

Certainly trust would work differently in an economic system that is mediated primarily by smart contracts. Do not forget, though, that you currently have the advantage of living in a society which has a functioning and accessible judicial system. Your level of trust is already very high. People who live in societies that don't have the same advantages are starting at a lower trust threshold.

Using imperfect smart contracts to mediate commercial transactions might be a step down for you. For other people, waiting for a perfect system does nothing but stop them from improving things right now.