Who will buy into Turing-complete smart contracts?

Rage Comment : The author of this article has many titles, one of which is Bitcoin evangelist. He used a lot of words to analyze the Turing-complete programming language of smart contracts in detail, pointing out that except for Ethereum, no other public blockchain has this feature. Bitcoin, which brought the world's first smart contract system, also deliberately avoided this concept. He believes that it has little significance for blockchain technology, so no individual or organization will buy into it.

Translation: Annie_Xu

Christ DeRose is a journalist, software developer, Bitcoin evangelist, public speaker, and lead developer of Drop Zone.

This article describes his discussion on blockchain-based smart contracts and why he believes the cost-effectiveness of applying the technology is not yet widely recognized.

For those who are lost in the fog of the blockchain future, what they are most concerned about is: What is the opportunity cost?

Currently, the relevant disputes in the blockchain field mainly revolve around smart contracts.

While I believe smart contracts will increase the efficiency of blockchain in the future, there is one type of smart contract that particularly arouses my suspicion: the recently popular “Turing Complete” smart contract.

All smart contract platforms used today are mainly divided into two categories, and the criterion for classification is Turing completeness. So what can this feature do? Turing completeness is a feature of all programming languages ​​that support computers to simulate the real world.

Turing-complete languages ​​can provide all the computer logic we are used to. Turing-completeness allows computers to form loops and process computer outputs in iterative and complex computer languages; but currently almost all public blockchains do not have this feature. However, the emergence of Ethereum brings this feature to those blockchain coders who are looking forward to it.

And Ethereum claims that this innovative integration of features is its competitive advantage, but in fact it is not enough. So why didn’t early blockchain technology use this language?

Bitcoin implemented the world's first smart contract system and intentionally avoided this feature. Bitcoin supports many simple contract types, including multi-signature (a way for multiple parties to allow value to be transferred), time locks (contracts that authorize the use of value after a certain period of time), and many simpler contracts that are similar to paper contracts that specify the distribution of benefits.

Turing completeness limits the programming possibilities of smart contracts to the processing time and creative activities chosen by the contract designer.

Cost-effectiveness

So what’s wrong with giving users more options?

First, allowing users to store more data on the blockchain brings more size and processing costs. For Bitcoin, adding even a megabyte of data every ten minutes is already controversial. For a Turing-complete blockchain like Ethereum, the size and processing issues are even more of a concern.

The high cost makes it difficult for small computers and nodes with low computing power and bandwidth to run blockchains, and of course those nodes running at long distances will also be affected. Although these low-end cost supports may seem insignificant in large banking projects, after all, the primary purpose of blockchain technology development is to be used in banking services in underdeveloped areas, so we have to consider the impact of this technical defect on the original intention of realizing blockchain technology.

In order to understand the advantages of blockchain technology in serving underserved areas, it is necessary to understand why the secure processing of transactions on the blockchain network requires user cost investment (or mining).

In Bitcoin, mining is a mechanism that rewards those who can benefit from the system. People mine to convert "registered" value, registered electricity, into "anonymous" value that can be used for online transactions.

They may do so because of local currency restrictions or to make online purchases more convenient.

But the cost of providing the service must be supported by a large number of users.

But it is unclear whether Turing-complete blockchain networks have such a requirement.

Internet benefits

These flaws leave a large number of users who are not well served by seeking Turing completeness, and therefore unable to build smart contracts.

Although there are still many users who cannot obtain basic contract services, the question is whether the value of this service difference can cope with the excessively high cost requirements.

Simply put, there needs to be more people than there are existing Bitcoin network users.

Currently, all Turing-complete miners only care about the speculative value of Ethereum, and we have not found any applications that are not well served. Therefore, this proposal is extremely important.

Another over-the-top proposal for Turing-complete smart contracts is an “oracle.”

In smart contracts, useful data must enter the blockchain through external sources; whether it is commodity prices or sports results, the source of all information must be forecasted by individuals.

These individuals are called "oracles."

On non-Turing-complete smart contract platforms, these oracles appear in a multi-signature contract; one party is the oracles, and the other two parties are the contract participants. In this "two-thirds" multi-signature operation, the oracles simply add the winner information to the blockchain, without additional code.

In the Turing-complete model, each contracting party personally enters the code prediction information into the blockchain in advance; then when the forecaster predicts the activity result data, the blockchain node determines the final result.

So what is the difference? In fact, in the Turing complete model, in order to corrupt the forecaster, the primary and secondary contracts can be forecasted simultaneously. This means that the participants of the Turing complete contract can not only participate in the contract, but also bribe the forecaster to obtain immunity from prosecution.

As more and more people participate in bribery and benefit, this problem becomes more and more prominent. Although in non-Turing complete contracts, it is still possible to bribe forecasters using traditional methods, and value transfer is not guaranteed; however, the risk of corruption is effectively reduced.

Transparency issues

But ironically, another big problem with Turing completeness is transparency.

In order to evaluate a Turing-complete contract, its code must be public; in a Turing-complete blockchain, this code is also required for participants to join.

While transparency is an advantage for many value transfers, there are obvious problems with being able to tell everyone what is going on. Most financial contracts require the parties to have asymmetric information to prevent non-parties from profiting from it.

For example, if a large bank is found to have access to a market (such as a futures contract), there is a risk that it will be publicly traded and the future fate of the contract may be affected before it is executed. Although there are some theoretical solutions to these information leaks, it may take a long time to actually achieve them, or even not happen at all.

Decentralization is almost inefficient and is generally only considered efficient when individuals have no choice at all. Only when decentralization is efficient around areas that meet regulatory random requirements can it be called the most successful blockchain.

Currently, code assessment requires the assumption of risk in order to justify the excessive cost and complexity of maintaining the cost. Most participants who need this service find that the payment transfer alone contains all these risks.

Offshore gambling organizations and blockchain users can run code on their own networks without fear of retaliation from service-friendly countries. In cases where people want the risk of failure to affect user maintenance, time-locked contracts are sufficient.

Blockchain is a magical tool that can meet the requirements of regulatory services.

However, as this new round of hype comes with a new stage of blockchain development, we must remember that when we look back, the answer to the question “Who needs Turing-complete smart contracts” is likely to be “No one does.”