Ethereum is a decentralized blockchain technology equipped with so-called Smart Contracts. A contract is a program whose code is public, which can be triggered by any user, and whose actual execution is performed by miners participating in Ethereum. Miners execute the contract on the Ethereum Virtual Machine (EVM) and apply its effect by adding new blocks to the blockchain. A contract that takes too much time to be processed by the miners of the network may result into delays or a denial of service in the Ethereum system. To prevent this scenario, termination of Ethereum's Smart Contracts is ensured using a gas mechanism. Roughly, the EVM consumes gas to process each instruction of a contract and the gas provided to run a contract is limited. This technique could make termination of contracts easy to prove but the way the official definition of the EVM specifies gas usage makes the proof of this property non-trivial. EVM implementations and formal analysis techniques of EVM's Smart Contracts use termination of contracts as an assumption, so having a formal proof of termination of contracts is crucial. This paper presents a mechanized, formal, and general proof of termination of Smart Contracts based on a measure of EVM call stacks.
The main quality of a smart contract relies on the automation of contractual relationships, as the performance is triggered by an algorithm in turn triggered by the fulfilment of certain events. Most of the benefits arising from smart contracts are based on the ‘self-executing’ and ‘self-enforcing’ character, which represent a source of innovation for general contract law. Smart contracts use blockchain to ensure the transparency of the contractual relationship and to create trust in the capacity to execute the contract, which depends on the technology used. The aim of the present essay is to investigate whether and how blockchain technology platforms and smart contracts could be considered a modern form of private authority, which at least partially escapes the application of mandatory rules and traditional enforcement mechanisms. In particular, the authors will devote attention to innovative self-help mechanisms and dispute resolution systems, which can be depicted as ‘alternative’ insofar as they present themselves as independent from courts and other national state authorities.
This Essay explores the barriers to deploying smart contracts in the consumer finance space: the humans themselves, existing consumer protection laws, and the other businesses which have financial contracts with consumers but that cannot deploy smart contracts. These three barriers render perfectly automated enforcement all but impossible. Nevertheless, there may be room for modifiable smart contracts in the consumer finance space – although these contracts may be only marginally more efficient than traditional contracts.
Purpose - This paper investigates applicability of blockchain based bill of lading under the current legal environment. Legal requirements of electronic bill of lading will be analyzed based on the Rotterdam Rules and recently enacted UNCITRAL Model Law on Electronic Transferable Records. Using comparative analysis with the previous registry model for electronic bill of lading, this paper examines the advantages of blockchain based bill of lading. Design/methodology - This research reviewed previous efforts for dematerializing bill of lading with its limitation. Main features of blockchain technology which can make up for deficiencies of registry model also be investigated to analyze whether these features can satisfy the requirements for the legal validity of the negotiable electronic transport record or electronic transferable records under the Rotterdam Rules and the MLETR. Findings - Main findings of this research can be summarized as follows: Blockchain system operated in an open platform can improve transparency and scalability in transfer of electronic bill of lading by assuring easy access for transaction. Distributed ledger technology of blockchain makes it more difficult to forge or tamper with transactions because all participants equally shares identical transaction records. Consensus mechanism and timestamp in a blockchain transaction guarantee the integrity and uniqueness of a transaction. These features are enough to satisfy the requirements of electronic transferable records under the Rotterdam Rules and MLTER. Originality/value - This study has significance in that it provided implications for the introduction of electronic bill of lading by analyzing whether the blockchain based electronic bill of lading model meets the legal requirements under the current legal system prepared prior to the introduction of blockchain technology, and by presenting the advantages of the blockchain based bill of lading model through comparative analysis with the existing registry model.
Статья посвящена исследованию места и особенностей такого нового института в договорном праве России, как смарт-контракт.Исследован зарубежный опыт по этой тематике
The public debate about smart contracts, meant as self-help remedies grounded on distributed ledger technology, is filled with alarms and high expectations. They have been praised by the tech community as infallible software able to carry out the whole contractual cycle, from formation to enforcement. Conversely, several legal scholars have raised concerns regarding both smart contracts’ inability to reflect relational aspects of contract governance and the augmented complexity generated by the translation of an agreement into computer code. The chapter focuses the discussion on the potential areas which could effectively benefit from implementation of smart contracts. Firstly, it argues that smart contracts might be a viable tool to tackle effectively consumers’ inertia in triggering and enforcing their rights which are standardized and easily verifiable. Secondly, smart contracts have the potential to foster commercial relationships by lowering down transaction costs arising from lack of trust between merchants. Thus, smart contracts are likely to provide better alternatives to traditional tools of business practice, such as letters of credit and escrow agreements.
It is quite likely that smart contracts, which represent a further step in formalizing contracts, will diminish the courts’ ability to intervene through interpretation. In a smart contract context, it is not obvious that the smart contract can go beyond the borders of the program to find relevant rules (off-chain elements and occurrences), limiting therefore the capacity to use blockchain technology in highly contextualized types of contracting. Courts generally come into play when complexity, doubts, and litigation around them arise. In order to assure the smooth development of automated contracts, the courts must develop the expertise to interpret them and smart contracts need to provide for parties to control real world consequences and be able to terminate the contracts if necessary during and after performance.
China’s contract law is examined to determine if there are legal ambiguities with regard to formation, performance, and modification of smart contracts and the problems relating to the enforcement, remedies, and dispute resolution. It is important to Chinese law not to act prematurely to change existing legal frameworks in response to a still evolving technology (blockchain-based smart contracts). On the other hand, the regulatory framework for platform operators needs be adjusted carefully to incentivize them to diligently check and verify the information of vendors who conduct business on the platform.
It provides an early overview of the cases where the use of smart contracts may prove significantly beneficial in B2C transactions. It focuses on the capacity of smart contracts to mitigate some of the well-known problems affecting B2C and B2B relationships. The adoption of regulatory sandboxes in the rail and air sectors will be described as a first testing ground to assess the potential of smart contracts.
Chapter 15 derives some general features of smart contracts by examining the technological approach for these contracts proposed by Ethereum and Solidity language. It relies on the concept of ‘interfaces’ to designate the relationships between the computer code of a smart contract and other external elements. According to this chapter, these interfaces are the exact locations of the legal connections between a specific piece of software and the real world. In particular, it argues that the smart contract environment is not a ‘lawyer-free environment’ due to the fact that smart contracts would necessarily interfere with real world persons or institutions that would by the nature of our societies lead to legal issues.
The chapter focuses on an important part of contract law, namely the law of excuses, in the context of smart contracts development. Smart contracts are supposed to secure actual performance, but to be able to do so appropriately, they need to take into account the possibility that a contract party may raise a valid excuse for non-performance of his obligations. Smart contracts should be able to deal with the possibility of at least some excuses; hence, this analysis may test the suitability of smart contracts for actual contracting. The chapter provides a comparative overview of excuses and hardship, culminating in a “common core” of the rules of various jurisdictions, and investigates whether and how excuses can be dealt with in smart contracts. This analysis shows some limitations of smart contracts, which leads to a more general discussion about possibilities and limitations of smart contracts.
Larry A. DiMatteo, Michel Cannarsa, Cristina Poncibò
Smart contracts have been a topic of interest to lawyers for some time now. The question regularly arises as to whether a smart contract can also constitute a valid contract on its own. This article examines this question, focusing on the basic principles of Swiss contract law.
The technology that makes smart contracts possible was developed with a view to enabling transactions to be made end-to-end without the intervention of third parties, intermediaries, adjudicators or courts. In this sense, it achieves in principle complete freedom of interaction. Whether this is the same thing as freedom of contract, however, remains to be seen. It is not yet clear, for example, which smart contracts will be legally enforceable, either because the parties do not want them to be, and/or because the courts do not recognise them as being so. What seems inevitable at this stage in the development of smart contract technology is that conventional contract law in its current form is unlikely to be the most effective way of adjudicating smart contract disputes. One reason for this is that securing performance will be far less of a problem under smart contracts than it is in relation to conventional contracts: the automated nature of the former means that actions are far more likely to be executed than those promised in the traditional way, albeit that their results might not accord with the parties’ expectations. Any issues are therefore far more likely to arise (or at least to be brought to a court’s attention) after a transaction has occurred. Automated execution means that parties are free to determine the contents of their agreements, and that machines will abide by those agreed instructions. The way in which smart contracts operate, therefore, means that any adjudication of them is likely to need to emphasise restorative rather than enforcement remedies. The extent to which the law chooses to do this will effectively determine how free smart technology users are to make legally recognised contracts.
Cryptocurrencies have been around since 2009 when the programmer Satoshi Nakamoto launched the technology behind Bitcoin. There are now several different cryptocurrencies and they are likely to be ...
It is unclear how bitcoins should be qualified from a legal perspective. This qualification is, among other things, relevant to determine how bitcoins should be transferred, pledged, attached and executed. In this article, bitcoins and bitcoin transfers are explained from a technical perspective and subsequently qualified from a contract and property law perspective. Given the borderless nature of bitcoins and its underlying bitcoin technology, these subjects are dealt with in an international manner, often drawing upon legal concepts which form the backbone of most if not all legal systems, especially those in the EU. In this article, the following conclusions are reached. First of all, from a contract law perspective, the bitcoin network qualifies as a multi-party contract to which the various participants (users, miners and nodes) accede by participating in the network for the first time and, in doing so, accept the third-party rights clause stipulated in that agreement in their favour. Secondly, from a property law perspective, the rights with respect to the bitcoins credited to a bitcoin address are put to bearer at the same moment these bitcoins are so credited. They are put to the bearer of the value bearer on which the private key associated with that bitcoin address is stored. That value bearer embodies the right of that bearer to perform the work necessary to transfer the bitcoins on that bitcoin address, more specifically vis-à-vis the miners to validate that transaction and vis-à-vis the nodes to verify the work of the winning miner. Those bitcoin rights can be transferred, pledged, attached and executed by possession of the value bearer.
Os smarts contracts são, em termos bastante gerais, protocolos informáticos que permitem que um dispositivo execute as prestações de um contrato de forma autônoma, logo, sem a necessidade de intervenção humana. A substituição da ação humana por um processo – conjunto de protocolos – que viabiliza (a) a automação de operações, (b) a materialização automática das prestações nas transações e (c) a utilização de outras tecnologias, as quais permitem a verificação do clausulado e da identidade dos sujeitos vinculados à transação resulta em elevada economia de custos. Ademais, as expectativas das partes para a satisfação de seus interesses negociais, tal como estabelecido no contrato, acabam sendo amplamente protegidas. Rapidez, previsibilidade e automação permeiam o exercício da autonomia privada, facilitando a efetiva autotutela. Não obstante os evidentes benefícios, tal figura apresenta limitações e desvantagens, trazendo consigo possíveis problemas. Este trabalho explora brevemente o fenômeno dos smart contracts, reflete sobre seu ecossistema particular e, a seguir, aborda importantes questões jurídicas que acompanham os smart contracts.
Among substantial advancements challenging contemporary contract law special attention is given to autonomous, cryptographic solutions based on decentralised infrastructure provided by blockchain technology, intended to execute transactions automatically, designated as smart contracts. The need for comprehensive research on legal implications of practical implementation of this technological innovation is triggered particularly by the prognostications declaring it a valid alternative to hitherto contract law framework that is expected to be ultimately replaced by algorithmic mechanisms underpinning smart contracts.A relevant assessment of the impact smart contracts are presumed to have on the contract law domain requires a thorough analysis of their juridical status. The specificity of the category of smart contracts raises doubts whether they comply with the definition criteria inherent to contract law terminology. Additionally, it is of material importance to determine the function smart contracts can perform in the sphere of contractual practice and to confront it with the role and axiology of contract law.The article aims at analysing the peculiarities of smart contracts from the perspective of the Polish private law system with account being also taken of current development tendencies concerning the concept of contract.
U radu je ukratko prikazana povijest pametnih ugovora. Kako bi njihov način rada bio jasniji, prikazani su Bitcoin blockchain te novosti koje je donio Ethereum, jedan od blockchain sustava koji se najčešće koristi kao temelj pametnih ugovora. Također, uz primjere iz prakse prikazana su neka od područja u kojima bi se pametni ugovori mogli koristiti. Potom se rad osvrnuo na moguće opasnosti i zloupotrebe koje pametni ugovori omogućuju. Kao zaključni dio rada obrađena je usporedba pametnih ugovora i ugovora u elektroničkom obliku kako bi se dao zaključak o kompatibilnosti načina rada pametnih ugovora sa zakonodavstvom Republike Hrvatske.
U ovom diplomskom radu opisat će se Ethereum globalna platforma, ether novac koji se koristi za vršenje transakcija na mreži, novčanik za čuvanje ethera i ethereum blockchain na temelju kojega je osmišljen Ethereum. Uz pomoć razumijevanja glavnih koncepata na kojima se temelji Ethereum lakše će se razumijeti princip na kojemu funckioniraju Ethereum pametni ugovori. Nakon opisa Ethereum blockchaina slijedi opis Ethereum pametnih ugovora te opis Solidity programskog jezika koji se koristi za izradu pametnoga ugovora. Zatim slijedi opis pametnog riješenja i tijek korištenja pametnog ugovora te opis razvoja programskoga riješenja unutar kojeg se opisuje razvoj pametnog ugovora za prodaju dobara u Solidity programskom jeziku i na kraju funkcije pametnog ugovora. Nakon izrade pametnog ugovora za prodaju dobara slijedi izrada korisničkog sučelja za krajnjeg korisnika. Opisane su korištene tehnologije i struktura projekta nakon čega slijedi opis komponenti aplikacije. Na kraju je opisan izgled konačnog programa. Slijedi postupak spajanja na decentraliziranu aplikaciju zatim opis panela kupca i prodavača koji se koriste za izvršavanje funkcija s pametnog ugovora za prodaju dobara. Osim glavnog panela opisan je i posebni panel za vođenje sporova za problematične narudžbe.
Die vorliegende Arbeit beschäftigt sich mit zivilrechtlichen Fragen in Bezug auf Smart Contracts, die auf einer Blockchain ausgeführt werden. Dabei stehen im Mittelpunkt der Darstellung die Rechtsnatur, das Zustandekommen, die Rückabwicklung der Smart Contracts sowie ihre mit AGB-recht sowie Gewährleistungsrecht verbundenen Probleme. Bei den Smart Contracts geht es um eine Kategorie von Computerprogrammen, durch die eine Leistungserbringung vorprogrammiert wird. Somit handelt es sich nicht um einen Rechtsbegriff. Blockchain ist eine Kette chronologisch aneinandergereihter blocks, die Transaktionen der nodes enthalten. Dieses dezentrale Datenregister kann aber nicht nachträglich verändert werden. Die Besonderheit, die Unveränderbarkeit der Blockchain, weist dabei aus zivilrechtlicher Sicht erhebliches Konfliktpotenzial auf, das auf die Divergenz zwischen den Datenblöcken und wirklicher Rechtszuständigkeit beruht. Als Lösung bietet es sich zum einen an, mit einer fiktiven Gegentransaktion auszugleichen. Zum anderen wird es vorgeschlagen, bei der Gestaltung der Smart Contracts eine Funktion zur Rückabwicklung zu beinhalten. Neben der Lösung dieses wesentlichen konzeptionellen Problems ist es noch für die Anwendung von Smart Contracts notwendig, die mit ihrer Implementierung zusammenhängende Technologie wie Internet der Dinge, künstliche Intelligenz usw. zu entwickeln.