ABSTRACT
Contract law imposes formal requirements on certain agreements as a pre-condition for enforcement. The main economic logic behind such requirements is to minimize transaction costs, for instance, by ensuring a public transaction record.
The technology of ‘smart contracts’ – algorithms that execute pre-defined actions if certain conditions are fulfilled – is a promising venue to achieve a similar goal through automation and transparency. However, smart contracts may also involve substantial costs, not only for the parties but also for society as a whole. In particular, as smart contracts are largely immutable, any (intentional or accidental) negative consequence may persist indefinitely …
Köksal, Bahadir and Sarel, Roee, The Smart Contracts Trilemma (January 15, 2024).
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