{"id":193590,"date":"2023-09-12T19:39:26","date_gmt":"2023-09-12T19:39:26","guid":{"rendered":"https:\/\/tokenstalk.info\/?p=193590"},"modified":"2023-09-12T19:39:26","modified_gmt":"2023-09-12T19:39:26","slug":"nyu-law-professors-argue-personal-growth-bets-using-smart-contracts-should-be-legal","status":"publish","type":"post","link":"https:\/\/tokenstalk.info\/crypto\/nyu-law-professors-argue-personal-growth-bets-using-smart-contracts-should-be-legal\/","title":{"rendered":"NYU law professors argue \u2018personal growth bets\u2019 using smart contracts should be legal"},"content":{"rendered":"
New York University School of Law professors Max Raskin and Jack Millman recently published a paper in the Journal on Emerging Technologies<\/em> discussing the legalities surrounding the use of blockchain-based smart contracts for the purpose of “personal growth bets.”<\/p>\n According to the duo, personal growth bets are single-party contracts that people would engage in with themselves. The purpose of these contracts would generally be for the purpose of self-improvement \u2014 to either start or stop a certain act during a given period of time or by a certain date. <\/p>\n The researchers use the notions of quitting smoking or losing weight to describe the concept. Per their paper:<\/p>\n \u201cFor example, a rough outline of such a bet would be: if Max does not lose 10 pounds over the next six months, he must pay Jack $1,000. Whereas, if he does lose the weight, Jack must buy Max a steak dinner.\u201d<\/p><\/blockquote>\n The core argument of the paper, according to the researchers, is that incentives can have a positive impact on a person\u2019s ability to succeed at difficult personal undertakings. However, without accountability, such incentives are less likely to work. <\/p>\n Smart contracts can \u201cserve the roles of enforcer and monitor, allowing an aspirant to effectively bind his future self without the need to involve another person,\u201d\u00a0according to the authors.<\/p>\n Raskin and Millman propose a scheme where a smart contract is conceived on the blockchain using \u201ccontractware,\u201d hardware used to measure or monitor the conditions of the bet, to enforce compliance with the contract\u2019s terms. <\/p>\n https:\/\/www.youtube.com\/embed\/TzdgwHX2xTs<\/p>\n In the case of quitting smoking, the researchers give the example of a person who places $10,000 in a smart contract that requires the user to remain smoke-free for 30 days in order to reobtain the funds. In the event of failure, the funds could, for example, be sent to a predefined charity of the user\u2019s choice.<\/p>\n In order to enforce the terms of the \u201cbet,\u201d the researchers envision a system wherein a user would confirm compliance through the use of a carbon monoxide breathalyzer \u2014 a gadget that can detect cigarette smoke on breath in much the same way an alcohol breathalyzer determines blood-alcohol level. <\/p>\n If the user missed a designated check-in or failed a breathalyzer test, the terms of the smart contract would execute autonomously, and thus, the user\u2019s stake would be forfeited. <\/p>\n While the concept is relatively straightforward, the legalities surrounding self-contracts and their enforceability are somewhat nebulous. The researchers claim there should be no legal impedance preventing people from tying up their own financial resources in a scheme to bet on themselves, and provided the terms are given legal \u201cconsideration,\u201d such a contract should ostensibly be legally binding. <\/p>\n Related: <\/em><\/strong>EU Data Act smart contract \u2018kill switch\u2019 brings uncertainty<\/em><\/strong><\/p>\n \u201c[T]here is no law against an individual giving his money away,\u201d write the researchers. However, they go on to point out that there should be limits to what one can use as a stake, especially when considering the autonomous nature of smart contracts.<\/p>\n The paper also considers the hypothetical case of an investor \u201cwilling to install a bomb in his skull\u201d in order to demonstrate the peson’s willingness to pay back a loan \u201csuch that it would explode if he missed a payment or tried to remove it.\u201d<\/p>\n According to the research, this would be deemed a form of \u201cstrong\u201d smart contract \u2014 as its terms contain an \u201cinfinitely high cost of revocation to the debtor.\u201d However, the paper also indicates such a contract likely wouldn\u2019t be legal as a self-contract due to the \u201cmany laws against suicide and\u00a0promoting suicide.\u201d<\/p>\n