If there's one thing that this thread is making clear is that the smart contracts are a really new thing for most of us. The entire concept and how it should be conducted hasn't crystallised yet.
This is an announcement thread on a bitcointalk forum. So these are the people that are the most in the loop. Outside there's a world where most people haven't even heard of cryptocurrency and think that Bitcoin is a video game or something.
The idea of complete strangers being able to negotiate any type of deal without any form of middle men or government protection is just utterly alien to them.
So I think some humility is required here.
Nobody has figured escrows out entirely. We don't know what the ideal escrow amounts are for each type of contract. There are many possible trades and deals possible in this world and they probably all require their own scheme.
There are three variables in a smart contract:
- Amount
- Symmetry in the collateral of each party
- Time (the optional limit after which the collateral is automatically destroyed)
These variables may be entirely different for a large gold trader, an online freelancer or a guitar merchant.
That's what fascinates me about this technology. Sure it has potential to be worth a dollar per BAY eventually but that's just lame speculation. What's really interesting is that we have barely begun to scratch the surface between the game theory behind all this. We don't know what people respond to best, we don't know what are the best and the worst scenarios and there's probably also a meta-game of contracts arising depending on the level of trust in the markets.
I can't be the only one who's excited about this.
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EDIT: For example, do you realise that the time extension on a smart contract also makes for a less riskful way of trading? I'm not sure if it's possible yet, (it certainly wouldn't be difficult to implement) but rather than burning the coins after expiration, the contract could also simply release the coins again. This means that you won't ever lose your escrow, but what you will lose is liquidity.
So in the situation where a deal goes bust and either one of the parties isn't happy. They chose not to release the coins immediately but after the four years that the escrow has set on it.
The unhappy customer may be fine with having his coins stalled for four years. But for a shady dealer looking to scam more people, those four years are disastrous. He needs that money right now in order to scam more people.
It's a far milder punishment for not holding up the deal but that may be a serious enough deterrent for serial scammers. In other words, merely having a time-release contract with a merchant is proof enough that you're not dealing with someone that is able to scam a lot of people.
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And for the speculative traders: Imagine a coin that encourages trading but occasionally burns or freezes coins like this. Imagine what that does to the value of the coins you yourself are holding
