Motion: Tokenization and Smart Contracts are Useful Ideas (Emin Gün Sirer vs. Edmund Schuster)

Guests:Emin Gün Sirer (@el33th4xor) - debating FOR the motionEdmund Schuster (@Edmund_Schuster) - debating AGAINST the motionHost:Richard Yan (@gentso09)Today’s motion concerns tokenization and smart contracts. Smart contracts' value proposition is to facilitate programmable transactions of tokens, in a manner that is decentralized, transparent, and cost-effective. A big part of the value, although not all of the value, in tokenization lies in the fact that disintermediated transactions of these tokens can take place via smart contracts.The only way to experience is the full debate is to listen to the episode in its entirety. Nevertheless for our busy listeners, here is a teaser that reflects part of the content:Gün argues that tokenization can put constraints on relationships to prevent errors and serve as a check on misbehavior. He cites examples that necessitate blockchain, such as the Dole company fiasco where actual number of shares outstanding exceeded the amount recorded. He agrees that tokenization on first-gen blockchain was flawed in divorcing digital assets from real world jurisdictions, but indicates that next-gen blockchain addresses this flaw by introducing a special set of nodes that hold the ledger, thereby allowing enforcement of jurisdictional legal requirements. Gün also discusses how blockchain combats rent-seeking, fosters automation and creates a trustless system unlike traditional client-server paradigms.Edmund contends that blockchain tech cannot encapsulate all the intricate details and complexity of real world, thereby necessitating some backdoor to address edge cases. Without it, a synchronization conflict arises between the state acknowledged by law and the state of the blockchain. He also indicate that lawyers can get creative in structuring arrangements to game a smart contract, rendering it useless. He thinks the next-gen blockchain with "privileged parties" that can rectify and reverse transactions looks similar to status quo, which is a trusted party with a database.Source of select items discussed in the debate:Dole Foods had 12 million more shares than the company thought existed: https://www.coindesk.com/dole-stock-crisis-reigniting-push-blockchainAva Labs: https://www.avalabs.org/"Cloud Crypto Land" paper by Edmund Schuster: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3476678Tokenization of NBA player's salary: https://www.coindesk.com/nba-players-contract-tokenization-plan-can-move-forward-reportsIllinois' smart contract bill: http://www.ilga.gov/legislation/BillStatus.asp?DocNum=3575&GAID=15&DocTypeID=HB&LegId=120249&SessionID=108&GA=101Numerai (crowd-sourced hedge fund): https://numer.ai/