He thinks he removed the necessity of a third party. That’s not entirely what happened.
When I look at how peer-to-peer trade is done on Open Bazaar (decentralized marketplace) you always have to get a “third party”, called a moderator, in case of litigation, chosen and accepted by both the buyer and seller, who will only enter the picture in case of disagreement between both side, which is, let’s say, 1% of the time.
In the event of the trade going smoothly on the contrary, this third party has been useless and both parties therefore conducted a trade without the need of an intermediary.
Do you see the main difference ?
Old Contracts
Need to rely on untrusted third party (notary, banks, government, who have proven record of being unreliable, untrustworthy), if you want to access the marketplace and conclude a trade. We as a society accept this, firstly because we want the reassurance of legal enforcement, which comes with the access to the marketplace, but mainly because we need to trade and don’t have any another choice.
New Smart Contracts
We don’t need to ask permission to enter a marketplace with its rules and notaries in place and forced down our throat, even if it is openly known that we can’t fully trust them, or that we might disagree with their rules.
Instead we can chose to be our own marketplace by entering an agreement together with a mutually chosen, agreeable third party who will only be needed in case of litigation.
Is it better ?
Yes indeed, now we have the following situation:
Old contracts: need of untrusted third party (because we can’t choose it and have proven record of being untrustworthy) but with legal enforcement assured.
New smart contracts: both people at the end of a trade can simply create their own marketplace completely with their own rules and own carefully chosen moderator in case of litigation. Completely bypassing notaries, banks, governments or other bodies.
In essence creating as many marketplaces as there are individuals willing to trade, each with its participants, sets of rules and moderators.
All of them being legal in their own way ! True Free Market. Isn’t it what this is all about ?
Reputation
What this comes down to in the end, is reputation. The current marketplace wouldn’t be that bad if there were a system in place to remove bad actors from the moderating position. Unfortunately this is clearly not the case, we’ve seen countless of abuse of trust, and power by those possessing it.
“Smart contract” ?
Using the same reasoning applied to bitcoin which is a free digital currency, in the sens that nobody owns it and everybody contributes to it. We can tell that these are more “Free Contracts” than they are “smart contracts”.
In this new picture we shall view the binding contract of transacting parties as Law and the Moderators as Judges.
This has further deep implications, that I might discuss in another post.
Read on:
https://openbazaar.org/blog/how-moderators-and-dispute-resolution-work-in-openbazaar/
