Thanks. That's exactly it. People might try to counter by saying that specific cases don't work that way, but that's not what game theory predicts. It won't tell you the outcome of a specific instance of a conflict, but it will predict the overall trend when a winning strategy exists. Traditionally, the counter to exploitable strategies was the honor system. You trusted the people you interacted with not to take advantage of you because you believed in their character. While that can work in specific cases, it's not an overall good system for running a large-scale system of social interactions because it invites exploitation. We tend to think of corruption as inevitable, but the degree of corruption in a system is actually somewhat predictable by the incentives for it built into the rules of the system when that system runs at a large scale.
Thanks for some fascinating contributions to this thread.
I see both sides of the debate, and lean toward your side. But I also think both sides are probably wrong to speak as if we will have either one system or the other in the foreseeable future. I think it is more likely that government resources and law enforcement will exist alongside any trustless contract system, acting as a failsafe (or guarantor of exploitation, depending on your POV I suppose). Few contracts would be irreversible, and few holders of contracts would resist reversal, if physical violence from the state were brought to be bear, even if the issue had already been "settled" by software. I believe the reality is that Ethereum-style contracts would increase efficiencies in more routine, less controversial contracts and the state would remain the final recourse in more extreme cases. As some have said, 30 years down the road when machines are more intelligent, all bets are off. But for the foreseeable future, the state isn't going to wither away just yet.
As far as people obfuscating with complex contracts, yes, of course they will do that. But the obvious implication is that a class of techno-jurists will have to arise to help advise users. Again, that's not much different than the current system of clueless folk consulting attorneys, and I imagine both systems would coexist for some time to come.
I definitely agree that smart contracts are going to be implemented as another layer. They'll erode the need for traditional enforcement slowly. And while there's a need for resolution when there's a bad contract, that resolution system doesn't always have to be a person.
Here's a simple theoretical example. People operate under a common, universal law system that defines the most basic rights. The rules of this system are only those which everyone who participates can agree to. For example, everyone agrees not to kill each other. People who do not accept these rules can form alternative societies, but they will not be able to access areas under common law through the use of smart locks and the like which restrict access to public spaces only to those who accept basic terms of behavior.
These rules can be under constant revision because the code that runs the base social platform is publicly audited, and anyone can submit a request to edit it. These revisions can be tested at smaller scales just by running the rules in private spaces. In your home, you can set whatever rules you want, but anyone running software with conflicting preferences will be alerted to the changes when they enter. If your home rules become popular with your friends, they may choose to implement them in their home. If enough people adopt them, the community may choose to implement them in certain spaces, and they can propagate outward.
The basis of this type of system would be mutual consent, and what a person consents to do can be adjusted at any time by their own software. It would be important that a person's personal platform was entirely under their control and only interacted with the outside world through approved protocols. Likely this would require a direct brain connection that could not be hacked because of physical safeguards.
Business could be conducted between communities that operated under entirely different rules through automatic contract negotiation. New ideas could spread from private to public spaces automatically through smart social contracts.
This is just one, very basic example of a society run by smart contracts. There's plenty of ways for these types of systems to be exploited, but that's part of the design process of any system. Particularly difficult is the problem of letting a machine which can be manipulated dictate so much of life.
But people's brains can be hacked already. Look at advertising, religious cults, mob mentality. People have always been vulnerable to manipulation, and we have developed an interconnected financial system where almost anything can be bought, especially power. We can learn from existing flaws as we develop new systems to fix the bugs in our biology and political systems that have made us vulnerable. We will definitely introduce new vulnerabilities. We just have to make sure we have a robust plan for continued development to respond to them.
If you asked Nash what he thought of game theory if he was alive today, he would tell you it have very little to do with how most people interact with each other.
It was said earlier. People get into contracts out of desperation or ignorance. Therefore there are contracts that are not mutually beneficial.
Since the vast majority of the people of this world are desperate or ignorant, ethereum can become a frightening tool.
Imagine this horrific scenario. It is the year 2030. Ethereum contracts can be written where a robot comes and steals your child for slavery automatically if you don't hold your end of the bargain.
Even today people sell themselves to pay off debts. Ethereum would just be another tool creditors can use to enslave people.
Game theory is usually presented as the science of human interaction, but I admit that I have no special knowledge about what Nash might think. I do think that individual interactions are very different from overall trends in the same way that the structure of how two grains of sand interact with each other is different from the structure of a beach as a whole.
I have no doubt that every new technology invites exploitation, and you're right to think about the consequences. That's an essential part of the design process of any technology, especially one that's general useful. That's the reason why we have such complicated software licenses.
But EvilCorp doesn't need smart contracts to send robots to steal your children. It will definitely use them if they're convenient, but they could just as easily go with the traditional human blood on dead trees contract that's ensnared many souls. Smart contracts add very little to their already efficient operation. But the people who can't afford to hire lawyers, bribe the police, and build robot armies will benefit a lot from enforceable contracts that don't require huge resources to enforce for purely digital transactions.
