Smart contracts are not recognized as legal contracts and don’t offer the same protections. They are more like stored procedures in that they are scripts that execute on a blockchain.
Vitalek Buterin, founder of Ethereum regrets naming them smart contracts.
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Links to this note
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Continuous Organizations Don’t Make Sense for High Growth Startups
Continous organizations are touted as a way to run a company in a radically transparent way on a blockchain. It aims to balance the incentives of the company owners, investors, and employees. However, this is probably impossible to do for a high growth startup.
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Smart Contracts Are a Computing Model That Requires Maintenance Forever
Smart contracts that run on a distributed ledger effectively need to work forever to be useful. Working forever requires maintenance and security—the longer a computer program runs, the more exposure it has to change and the opportunity to be exploited.
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Nfts Are a Subset of Ownership
NFTs lack the legal and regulatory protection of other forms of property. In the event of a dispute, there is no oversight. This fundamental principle of crypto projects (decentralization, no middle man, zero trust) limits what can be represented as a non-fungible token.
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Distributed Autonomous Organizations Are More Like an LLC
Distributed autonomous organzations (DAOs) have more in common with limited liability corporations (LLCs) than C Corporations. There is near infinite variability possible in an LLC’s operating agreement similar to how DAOs can be grant DAOs, investment DAOs, protocol DAOs, and many more. C Corps on the other hand have converged on, more or less, a standard—Delaware C Corp and a well-known governance structure based on ownership of stock.