Thread by @hasufl

I don't really share the view "the outcome of a smart contract is law/code is law"

Smart contracts don't replace basic moral behavior or the traditional legal system, and that's okay:

(a thread on the most important concept in crypto💡)

https://twitter.com/StaniKulechov/status/1444291856498663429

Economic interactions are only possible when trust between parties can be established.

So humans create institutions like moral codes/religion, a monopoly on violence, the legal system, markets, money, etc. to establish trust between participants and lower transaction costs.

But existing institutions can be faulty, expensive, unfair, or too local (how do you establish trust between someone in the US and China?)

This is where blockchains and smart contracts come in.

Blockchains are global trust machines, allowing us to rely on existing institutions less often.

They are already the cheapest way to establish trust in many economic interactions today.

Reducing the cost of trust is THE single biggest reason why crypto is revolutionary.

All institutions exist in stack. When one fails, you appeal to the next.

When a market fails (e.g. because you got scammed), you appeal to a court.

If the court fails (e.g. delivers bad judgment), you appeal to a higher court.

This layered approach is a strength, not a weakness.

It is only just that when a smart contract fails, you can (and should) still appeal to any other institutions you can.

Sometimes recourse is impossible because parties are anonymous, but that shouldn't be confused with thinking that seeking recourse is bad *in general*.

Redundancy creates trust.