Blockchain technology has the potential to solve a dizzying array of problems, both large and small. Many people, recognizing the depth of this promise, have hung heavy expectations on the growth of the space. In particular, a number of observers have begun to view the smart contracts that underpin many blockchain projects something close to a panacea, with the power to “fix” contracts completely. We must guard against such unmitigated exuberance if we want to harness smart contracts for their true potential.
I don’t disagree that smart contracts are a transformational tool with enormous potential to improve commerce. But I want to cool some of the hype before it turns into complacency. Remember, smart contracts are conditional instructions to perform specified actions—essentially, if/then statements—written in code. The immutability and security of the blockchain make them a powerful tool, but they are not infallible. We must make sure we do not shut our eyes to their potential pitfalls.
