“Smart Contracts” Are Way Dumber Than You Think
Uncovering the bad engineering behind ‘smart’
Every other day you read an article on Bloomberg or the Financial Times about one of these so-called smart contracts exploding and people losing a ton of money. However, the public perception of this technology is mired in all manner of confusion and misconceptions about what these financial landmines are.
Put simply, a smart contract is an app, much like the ones that run on your phone; a piece of computer software that runs code that controls a pool of casino tokens. The aspect that separates this type of software from normal software is that this application is forced to respond to any and every request by the design of the blockchain platform it runs on. Internal to this software, there are a set of rules written by another human being that describe a process by which users can interact with the casino tokens locked inside it.
The dumbest smart contract would be a metaphorical box in which users can deposit tokens. When they deposit a fixed amount of tokens, N, they get a receipt that remembers how much they put into the box, and when they return with the receipt, they can withdraw N tokens. This example is a simple process to state in English, and an equivalent transcription of this idea can be encoded in a computer program and run…
