"Bitcoin's Dark Side Could Get Darker"

That's the title of this interesting article by Tom Simonite over at the MIT Technology review. Simonite outlines a myriad of ways that online, "smart-contract" platforms such as Ethereum may be used to facilitate activities that, at best, are difficult to regulate, and at worst, are criminal.

From the article:

In a paper to be released today, Juels, fellow Cornell professor Elaine Shi, and University of Maryland researcher Ahmed Kosba present several examples of what they call “criminal contracts.” They wrote them to work on the recently launched smart-contract platform Ethereum. 

One example is a contract offering a cryptocurrency reward for hacking a particular website. Ethereum’s programming language makes it possible for the contract to control the promised funds. It will release them only to someone who provides proof of having carried out the job, in the form of a cryptographically verifiable string added to the defaced site. 

Contracts with a similar design could be used to commission many kinds of crime, say the researchers. Most provocatively, they outline a version designed to arrange the assassination of a public figure. A person wishing to claim the bounty would have to send information such as the time and place of the killing in advance. The contract would pay out after verifying that those details had appeared in several trusted news sources, such as news wires. A similar approach could be used for lesser physical crimes, such as high-profile vandalism.

Admittedly, not all uses of bitcoin and smart-contract platforms are criminal. But many non-criminal uses may still be very difficult to regulate. The article concludes:

“The potential for Ethereum to alter aspects of society is of significant magnitude,” says Wood. “This is something that would provide a technical basis for all sorts of social changes and I find that exciting.” 

For example, Wood says that Ethereum’s software could be used to create a decentralized version of a service such as Uber, connecting people wanting to go somewhere with someone willing to take them, and handling the payments without the need for a company in the middle. Regulators like those harrying Uber in many places around the world would be left with nothing to target. “You can implement any Web service without there being a legal entity behind it,” he says. “The idea of making certain things impossible to legislate against is really interesting.”