New York University School of Law professors Max Raskin and Jack Millman recently published a paper in the Journal of Emerging Technologies discussing the use of blockchain-based smart contracts for “ The legality of personal growth bets.
According to the pair, a personal growth bet is a one-sided contract a person makes with himself. The purpose of these contracts is usually for self-improvement—to start or stop a certain behavior by a given time period or date.
Researchers use the concept of quitting smoking or losing weight to describe this concept. According to their paper:
“For example, the rough outline of such a bet is: If Max doesn’t lose 10 pounds in the next six months, he must pay Jack $1,000. However, if he does lose weight, Jack must pay Max Have a steak dinner.”
The paper’s central argument, the researchers say, is that incentives can have a positive impact on a person’s ability to succeed in a difficult personal career. However, without accountability, such incentives are unlikely to work.
The author states, “Smart contracts can act as executors and supervisors, allowing aspiring individuals to effectively constrain their future selves without the involvement of others.”
Raskin and Millman proposed a scheme in which smart contracts are conceived on the blockchain using “contract software,” which is hardware used to measure or monitor betting conditions to enforce compliance with the terms of the contract.
In terms of quitting smoking, the researchers gave the example of a person who invested $10,000 in a smart contract that required them to remain smoke-free for 30 days in order to regain their funds. For example, if that fails, funds can be sent to a predetermined charity of the user’s choice.
To enforce the terms of the “stake,” the researchers envisioned a system in which users could confirm compliance by using a carbon monoxide breath analyzer, a device that detects cigarette smoke in the breath like an alcohol breath analyzer. Determines blood alcohol concentration.
If the user misses the designated check-in or fails the alcohol test, the terms of the smart contract will be automatically executed and the user’s rights and interests will be forfeited.
While the concept is relatively simple, the legality of self-contracts and their enforceability are somewhat vague. The researchers claim that there should be no legal barriers preventing someone from tying up their own financial resources in their own betting scheme, and that as long as the terms are legally “considered”, such a contract should be ostensibly legally binding.
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“There is no law prohibiting individuals from donating money,” the researchers wrote. However, they went on to note that what people can use as shares should be limited, especially when considering the autonomous nature of smart contracts.
The paper also considers a hypothetical case in which an investor “is willing to plant a bomb in his skull” to demonstrate his willingness to repay a loan, “so that if he misses a payment or attempts to delete the loan, the bomb will explode”.
According to the study, this would be considered a “strong” smart contract – as its terms include “infinitely high costs of rescission by the debtor”. However, the document also states that such a contract “may” not be legal as a self-contract due to “many laws opposing and promoting suicide.”
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