Many see blockchain technology as a transformative power. Its potential to disrupt various industries is widely acknowledged, prompting many users, investors, enthusiasts, and critics to explore innovative ways to harness its potential. Implications of this technology are progressively unfolding within the legal field; a fascinating manifestation is the advent of blockchain-based ‘personal growth bets’ through smart contracts.
Law professors at New York University, Max Raskin and Jack Millman, recently proposed that these single-party contracts, designed to incentivize self-improvement activities such as quitting smoking or losing weight, should be legal. To better understand, consider a scenario where a person places $10, 000 into a smart contract requiring them to quit smoking for 30 days to reclaim the funds. Failure to meet the condition results in the funds being sent to a pre-selected charity.
These smart contracts operate as both enforcer and monitor of self-set goals, allowing the individual to commit their future selves without involving others. A digital carbon monoxide breathalyzer tests the person’s adherence to the contract’s terms. In the event of a missed check-in or failed test, the smart contract executes autonomously, forfeiting the user’s stakes.
While the framework appears fairly simple, it dances around legal grey areas surrounding enforceability and legality of such self-contracts. The professors suggest no legal barriers that prevent an individual from sequestering their funds to back a personal growth bet. However, and this is where the idea teeters on the precipice of legal ambiguity, they admitted there should be a limit to what can be used as stakes due to the autonomous nature of smart contracts.
The paper laid out a dystopian hypothetical wherein an investor installed a ‘bomb’ in their skull to ensure loan repayment, declaring it as a type of ‘strong’ smart contract due to its terminal cost of default. Needless to say, such a contract would likely be legally inadmissible due to laws disallowing self-harm.
Dealing with blockchain and smart contracts involves a finely balanced scale of ambition and caution. While the innovative technology champions personal improvement and serves as an inescapable commitment tool, it flirts with unchartered legal territories and socioethical norms that should not be casually overlooked. Therefore, while blockchain may be poised to revolutionize how individuals self-commit to growth, it remains to be seen if the legal world, and society at large, are ready to embrace such a paradigm shift.
Source: Cointelegraph
