Editing Dumb contracts (section)

= Smart contracts =

Consider trading cryptocurrencies via a micro-payment channel where only a micro quantity is needed as collateral. If such a contract only requires a minimal amount of trust to run is it smart or dumb? I would say dumb since the micro-collateral is still at risk to a third-party (even though it may only be fractions of a cent.) We should instead reserve the term “smart contract” for contracts that are wholly trustless in the same way that Bitcoin is.

I consider this a useful definition for trust because I believe it is a unique benefit to using Bitcoin. Everything else is just a standard transactional protocol – completely unremarkable in every way.

Here’s a list of contracts which fit my stricter definition: * Cross-chain contracts * Atomic cross-chain contracts * Atomic storage contracts (disclaimer: some of my work) * ZK swaps (disclaimer: some of my work) * Secure multi-party gambling protocols * Secure multi-party lottery protocols * Certain reward protocols like fair random rewards in games, and virtual items traded over the blockchain. * Micro-payment channels * Lightning networks * Thunder networks * Hub-and-spoke micro-payment channels * Two-way pegs * Artificially intelligent agents operating strictly on publicly accessible, verifiable data sets such as data contained in torrents in order to find useful patterns. * Certain Internet-based applications that depend on a ledger like Namecoin. * Certain kinds of contracts backed by collateral where game theory can be used in such a way that the protocol always proceeds as intended regardless of the actions of the participants (e.g. some lottery protocols.) * Greg Maxwell’s conception of zero-knowledge contingent payments * Other innovative stuff that I’m missing (sorry)

You may think that this is needless nitpicking as the blockchain still allows us to vastly reduce trust when it comes to maintaining accurate records of ownership, but I believe its highly misleading to lump all smart contracts into the same category since you end up implying that a system that relies on third-party trust provides the same level of security as something like a cryptographically enforceable gambling protocol, which is ridiculous.

Actual smart contracts (in my experience) are much harder to invent and produce software for so if we reward every dumb contract with the same level of exposure as say - the Lightning Network - we promote a culture of laziness where cutting corners is more profitable than doing new research. Probably not the best situation for the businesses and customers in the blockchain space who depend on having secure software …

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