SWPS University of Social Sciences and Humanities
Law and Forensic Science, Volume 16 (2018/2), pages 1-6.
Submitted: July 11, 2018.
The author declares there is no conflict of interest.
Abstract: Smart contracts are computer programs executed on virtual machines, which are used to regulate relationships between the subjects of law. They allow parties to foresee, with a high degree of certainty, how will the contractual relationship develop and by the use of blockchain technology they provide a high degree of certainty. It has been conjured that smart contracts will offer significantly lower transaction costs in relation to traditional contracts. The paper analyzes this proposition and finds that not only are the gains doubtful, but also that in some cases transaction costs may be significantly higher.
Keywords: smart contract, transaction costs, blockchain
Christidis, K., & Devetsikiotis, M. (2016). Blockchains and Smart Contracts for the Internet of Things. IEEE Access,4, 2292–2303.
Clack, C. D., Bakshi, V. A., & Braine, L. (2016). Smart Contract Templates: Foundations, Design Landscape and Research Directions. ArXiv:1608.00771 [Cs]. Retrieved from http://arxiv.org/abs/1608.00771
Cunningham, A. (2016). Decentralisation, Distrust & Fear of the Body – The Worrying Rise of Crypto-Law. SCRIPTed, 13(3), 235–257. https://doi.org/10.2966/scrip.130316.235
Dahlman, C. J. (1979). The Problem of Externality. The Journal of Law and Economics, 22(1), 141–162. https://doi.org/10.1086/466936
Dannen, C. (2017). Introducing Ethereum and Solidity. Retrieved from http://link.springer.com/content/pdf/10.1007/978-1-4842-2535-6.pdf
DuPont, Q. (2017). Experiments in Algorithmic Governance: A History and Ethnography of “The DAO,” a Failed Decentralized Autonomous Organization. In Bitcoin and Beyond: Cryptocurrencies, Blockchains and Global Governance. New York.
Dyer, J. H., & Chu, W. (2003). The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea.Organization Science, 14(1), 57–68. https://doi.org/10.1287/orsc.184.108.40.20606
Governatori, G., Idelberger, F., Milosevic, Z., Riveret, R., Sartor, G., & Xu, X. (2018). On Legal Contracts, Imperative and Declarative Smart Contracts, and Blockchain Systems.Artificial Intelligence and Law. https://doi.org/10.1007/s10506-018-9223-3
Künnapas, K. (2016). From Bitcoin to Smart Contracts: Legal Revolution or Evolution from the Perspective of de lege ferenda? In The Future of Law and eTechnologies(pp. 111–131). Springer. Retrieved from http://link.springer.com/chapter/10.1007/978-3-319-26896-5_6
Levy, K. E. (2017). Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law. Engaging Science, Technology, and Society, 3, 1–15.
Luu, L., Chu, D.-H., Olickel, H., Saxena, P., & Hobor, A. (2016). Making Smart Contracts Smarter. In Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security(pp. 254–269). ACM. Retrieved from http://dl.acm.org/citation.cfm?id=2978309
May, T. C. (1992). The Crypto Anarchist Manifesto. Retrieved October 25, 2017, from https://www.activism.net/cypherpunk/crypto-anarchy.html
Mehar, M., Shier, C., Giambattista, A., Gong, E., Fletcher, G., Sanayhie, R., … Laskowski, M. (2017).Understanding a Revolutionary and Flawed Grand Experiment in Blockchain: The DAO Attack(SSRN Scholarly Paper No. ID 3014782). Rochester, NY: Social Science Research Network. Retrieved from https://papers.ssrn.com/abstract=3014782
Peters, G. W., & Panayi, E. (2016). Understanding Modern Banking Ledgers Through Blockchain Technologies: Future of Transaction Processing and Smart Contracts on the Internet of Money. In Banking Beyond Banks and Money(pp. 239–278). Cham: Springer. Retrieved from http://link.springer.com/chapter/10.1007/978-3-319-42448-4_13
Posner, R. A. (2004). The Law and Economics of Contract Interpretation. U Chicago Law & Economics, Olin Working Paper, (229). Retrieved from http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=610983
Schwartz, A., & Scott, R. E. (2003). Contract Theory and the Limits of Contract Law. The Yale Law Journal, 113(3), 541–619. https://doi.org/10.2307/3657531
Sklaroff, J. M. (2017). Smart Contracts and the Cost of Inflexibility. University of Pennsylvania Law Review, 166, 263.
Szczerbowski, J. J. (2018). Lex cryptographia. Znaczenie prawne umów i jednostek rozliczeniowych opartych na technologii blockchain. Warszawa: PWN. Retrieved from https://ksiegarnia.pwn.pl/Lex-cryptographia,751866914,p.html
Vatiero, M. (2013). Law, Transaction Costs and Coase’s Institutions. A Reappraisal. Economia e Politica Industriale. https://doi.org/10.3280/POLI2013-004006
Wojdyło, K. (2016). DAO a prawo karne. In J. Zandberg-Malec (Ed.), Nowy raport: Blockchain, inteligentne kontrakty i DAO | Co do zasady. Warszawa: Wardyński i Wspólnicy. Retrieved from http://www.codozasady.pl/nowy-raport-blockchain-inteligentne-kontrakty-i-dao/