The Limits of Smart Contracts

Frankenreiter, Jens

doi:10.1628/jite-2019-0021

Cited by 20 publications

(28 citation statements)

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“…These smart contracts "can be described as computer programs that trigger certain prespecified actions (such as sending a certain amount of tokens to a specific address in the network) if the conditions set out in the code are met." 91 As the execution of smart contracts doesn't require cooperation from the legal system, regulation cannot prevent it from happening unless smart contracts are illegal and the legal system can enforce their prohibition. And yet, the blockchain is not only a source of strength for such contracts, but also a limitation.…”

Section: How To Regulate Fintech?mentioning

confidence: 99%

FinTech and the law and economics of disintermediation

Kaja¹,

Martino²,

Pacces³

2021

Routledge Handbook of Financial Technology and Law

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Section: How To Regulate Fintech?mentioning

confidence: 99%

FinTech and the law and economics of disintermediation

Kaja¹,

Martino²,

Pacces³

2021

Routledge Handbook of Financial Technology and Law

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“…The seemingly trivial question about the contractual nature of smart contracts is, in fact, at the heart of the debate (Bourque and Tsui, 2014; Frankenreiter, 2019; Murphy et al, 2016). Two main schools of thought can be distinguished:…”

Section: The Relationship Between Computer Code and Lawmentioning

confidence: 99%

“…We now synthesize the previous perceptions of smart contracts based on our interviews and review of the existing literature. In overwhelming agreement across the mainstream opinion, from legal scholars as well as practitioners and legal experts in our interviewee sample, it is highly unlikely that smart contracts would be expected to create a separate realm outside of any state influence (Frankenreiter, 2019). Their arguments can be grouped into pragmatic and principles-based standpoints:…”

Section: The Relationship Between Computer Code and Lawmentioning

confidence: 99%

Is code law? Current legal and technical adoption issues and remedies for blockchain-enabled smart contracts

Drummer

Neumann

2020

Journal of Information Technology

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Blockchain technology has enabled so-called smart contracts between different parties on a decentralized network. These self-enforceable and self-executable computerized contracts could initiate a fundamental paradigm shift in the understanding and functioning of our legal practices. Opportunities for their application are increasingly understood, and numerous tests of feasibility have been completed. However, only very few use cases have yet been implemented at scale. This article—as the first of its kind—comprehensively analyzes the underlying challenges and locates a key reason for the slow adoption in the discrepancy between legal requirements and IT capabilities. Our work combines a wide range of academic sources and interviews with 30 domain experts from IT, the legal domain and private industry. First, we establish that smart contracts still fall within the boundaries of the general legal framework. We then systematically dissect current shortcomings of smart contracts on three distinct levels, namely, (1) how smart contracts are likely to cause conflicts with existing laws, (2) how smart contracts are intrinsically limited on an individual contract level and (3) how they are impeded by their current technical design. Across those levels, we dissect 20 distinct issues concerning the current implementation of smart contracts for which we derive potential remedies. We further outline implications for policy-makers as well as IT management, and examine how information systems research can play an important role in advancing smart contracts. Finally, we show how managerial and organizational issues might represent an ongoing challenge for the widespread adoption of smart contracts.

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“…The question on the legality of the first type of contracts has received plenty of attention (Frankenreiter, 2019;Waltl et al, 2019) Authors have argued that some smart contracts are compatible with current legislation, at least in a few industrialized countries (De Filippi and Wright, 2018). More generally, it seems that laws and regulations will need to be changed or updated.…”

Section: Smart Contractsmentioning

confidence: 99%

Taming the Beast: Harnessing Blockchains in Developing Country Governments

Zambrano¹

2020

Front. Blockchain

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Amid pressing demands to achieve critical sustainable development goals, governments in developing countries face the additional complex task of embracing new digital technologies such as blockchains. This paper develops a framework interlinking development, technology, and government institutions that policymakers and development practitioners could use to address such a conundrum. State capacity and democratic governance are introduced as drivers in the overall analysis. With this in hand, blockchain technology is revisited from the perspective of governments in the Global South, identifying in the process key traits and proposing a new typology. An overview of the status of blockchain deployments in the Global South follows, complemented by a closer look at country examples to distill trends, patterns and risks. The paper closes with a discussion of the findings, highlighting both challenges and opportunities for governments. It also provides basic guidance to development practitioners interested in enhancing current programming using blockchains as an enabler.

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The Limits of Smart Contracts

Cited by 20 publications

References 0 publications

FinTech and the law and economics of disintermediation

FinTech and the law and economics of disintermediation

Is code law? Current legal and technical adoption issues and remedies for blockchain-enabled smart contracts

Taming the Beast: Harnessing Blockchains in Developing Country Governments

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