To be honest, I have missed the crypto hype for a longer time (I had to work) and I am not a bitcoin billionaire ;-( But I really want to understand how blockchain can be used these days in the real world, not just for gambling, crypto kitties etc. I have tried to ask several blockchain experts and teams pretending to be guru’s, but as soon as I face them to the issues, they are not interested in the conversation anymore: “Shut up, make an ICO and take the money!”. Today at the Bangkok airport, while waiting in the line, I have launched Medium and the smart app recommended me an article “Popular Use Cases of Blockchain Technology You Need to Know”. Awesome, that is exactly what I need. Let’s read it… aha!. oh.. hmmm. Wait a minute… Let’s look at the examples provided in the article.
Problem: Mark hasn’t paid his rent for five months. When Sara questions, he promises to pay later. She is helpless. She cannot afford a lawyer. Courts take eight months to almost a year to enforce action. The only option is to persuade Mark.
Suggested solution: to set up a smart contract, so the payments are triggered automatically every month.
If today’s date is the 30th and the rent is not paid, transfer 500$ from Mark’s account to Sara’s account.
So far everything is fine, right? Let us extend the story to make it more dramatic. After a few weeks of signing THE SMART CONTRACT, Sara changes her mind, because she wants to use the flat as a yoga studio or maybe she decided to rent it on Airbnb to make more money, whatever, we do not know why. Since she has another key as landlord, she uses the time while Mark is not at home and throws his few belongings on the street and changes the lock. “Why not?” She thinks: “Before setting up THE SMART CONTRACT he did not pay for months, the hobo, so who cares.” Few hours later, Mark is back in the apartment and realises, that he is not living here anymore. He thinks: “Thanks to the holy blockchain I have THE SMART CONTRACT, it is distributed and nobody can break it, I just need to … to do what??? How to cancel this f…ing contract? I need to go to all the participants of the the chain and convince at least a half of them, that the contract was broken by this bi..ch. Fck! Ok, cool down. Let’s go to the bank and try to cancel the upcoming transactions.” Bank manager: “Hola, Mark! Aha. Yes, terrible (true)story. Sorry sir, but I cannot do anything about it, it is on THE BLOCKCHAIN and the transactions are going to be triggered automatically, isn’t it nice? 🙂 Good luck! Ah, wait a minute… Maybe I can do something for you. Yes, here is a flyer of our partner hotel!” … Mark: “Shit. Shit. I’m lost. Ok, give me the flyer, do they accept Telegram coins? ” … (Other (true)story)
What do we see? The problem is still not solved and for Mark (the buyer) it can be even quite unfair in the end. The same thing is about the second example about Joe’s business, there is no major difference, it just does not work, if the service side is not delivering. The only solution in such a case is to introduce an additional role, an authority or so-called oracle, who should decide if the contract was fulfilled on both sides. But as long as it cannot be fully automated, there is no difference to judges, lawyers, banks, notaries.
I wrote the author about my concerns, the answer was just: “The terms would support both, the buyer and the seller, just like in the normal contracts.” Well, well… so where is the advantage of THE SMART CONTRACT? Is it only the fact, that the money will be transferred automatically and there are not only two copies of the contract, but several distributed copies? Any modern bank can do automated recurring payments and in case of any problems or if you decide to terminate the contract, you can cancel the payment. In case of any problems, the bank and a lawyer can help you (hopefully). It works on both sides, not only for the sellers. Take a look at PayPal, it is exactly, what they are doing: processing payments and resolution of the issues.
But let me try to be a bit more optimistic than I am and look into the brave new world full of AI, IOT and smart robots everywhere. Imagine Mark and Sara are living in the future, where people still do not trust each other, but they trust machines. Sara’s apartment would be a fully equipped smart home with face recognition at the entrance (Hi to BuddyGuard), smart fridge, which would order the lactose free milk as soon as needed (Hi to FreshFridge), a smart coffee machine, which would start to roast the beans and brew the coffee before your arrival (Hi to BonaVerde) etc. Just tell your connected, smart home sweet home what you need. Probably either Alexa or Siri or Google Assistant will organize everything and you just need to choose, which provider of smart homes do you trust more. Trust to own all your data, everything from what are you eating, when and where you are out, with whom and how you are sleeping… In this beautiful new, transparent world where you share all your entire daily life with the cloud, the scenario above would actually work, because all the transactions can be digitalized and distributed on the blockchain. Did your job on the toilet? It is on the blockchain! So nobody has doubt that you did it and the toilet paper will be ordered on time 👍 Landlords cannot just block your key as long as you are paying. Nice, isn’t it? You just need to give up your privacy and let the machines judge who is right and who is wrong, machines are not lying 🤖 Well if they are not hacked 😉 A topic for the next season of Black Mirror 😉
I am still trying to find an answer, how to solve this problem without a total digitalization and a middleman. If you have an answer please let me know.
Author: Andre Zayarni, CTO at MoBerries
You are looking for a job in the blockchain industry? Get the job YOU want!