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Cryptocurrency's peer-to-peer nature puts control back in the client's hands. With the blockchain system, if Alice wants to send Bob bitcoins, she doesn't need to channel that transaction through an intermediary. This system makes smart contracts customizable: The sender can stipulate that the transaction go from A to B only if certain conditions are met.The vending machine is a simple example. The machine holds onto the snack until it receives payment. But once a user slips in some money and selects from an array of snacks, the selection pops out. The code executes when a payment is made. The deal is between you and the machine.This concept could decentralize trust when it comes to legal contracts and dispute resolution. A cryptographic contract will execute exactly as it is written, and if the attorney or contract writer doesn't properly explain the terms, they could be sued or risk a sullied reputation. While the current court system relies on trusting the opinions of sometimes imperfect judges enforcing potentially discriminatory laws, smart contracts are unambiguous. They are enforced by cryptographic algorithms. The rules of the game are determined before the contract executes, rather than at the foot of a judge's podium.Smart contracts are unambiguous. They are enforced by cryptographic algorithms. The rules of the game are determined before the contract executes, rather than at the foot of a judge's podium.
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Here's where bitcoin's cryptoanarchy bent comes into play. Peer-to-peer contracts and smart dispute resolution could provide opportunities for oppressed populations, by allowing people to draw up contracts outside of the established system—maybe an agreement to transfer bitcoin or a write a more favorable marriage contract.With enough people using the system, people could even draw from a global pool of jurors to settle a dispute, rather than rely on potentially discriminatory court systems. "This technology is so powerful because it doesn't recognize borders or people in power. It just recognizes transactions. It recognizes math," Morgan said. "It's such a new perspective. It's a new way of looking at things."As enticing as these possibilities are, a series of "ifs" precede the proliferation of smart contracts. Most glaringly, bitcoin itself needs to cut through a thick of obstacles to achieve wider acceptance. Smart contracts also face a slew of technological and legal hurdles before they'll attract widespread use: Once Ethereum gets off the ground, customizable templates need to be drawn up to make smart contracts easier to use. The legality of the system is still a bit hazy, and there are significant concerns about anonymity.With all this to consider, visions of decentralized dispute reconstruction sound premature. But these tools are advancing. Bitcoin enables the sorts of contracts Nick Szabo—the computer engineer who coined the term smart contracts and a Satoshi Nakamoto candidate—outlined in an influential paper nearly 20 years ago. With the technology out there in the open for anyone to explore and improve, it could very well stare today's traditional legal process in the face."It's not necessarily about getting rid of [current] systems," Morgan said. "It's about critically thinking about them and evaluating them. And now knowing that we have the power to do something about it. That's the part that's been missing."This technology is so powerful because it doesn't recognize borders or people in power. It just recognizes transactions. It recognizes math.