> My grandfather used to do business out of his wallet with cash and handshakes. He would do deals with farmers to make things in his workshop, and then get paid in pigs/parts of cows 6 months later. Farmers in particular are extremely reliable and credible people.

You don't think that this kind of trust exists outside of the developed world? Why do you think that your grandfather's experience is unique, compared to small farming communities anywhere else in the world where people have already known each other and done business with each other for many years?

> When you're dealing with industrial level trade and commerce, esp. with far flung traders and investors - yes, you're right. And you're right to point out the relationship on some level. But ultimately, Crypto is not going to add integrity to the system, and, integrity is essential.

The argument I am making is that at the industrial level, the existence of institutions capable of mediating disputes and enforcing agreements paradoxically increase levels of trust within society as a whole by reducing the need for counter-parties to depend on each other's personal integrity.

Of course personal integrity is important in business! But it is not a difference in integrity between societies that explains differences in development. Rather, differences in development can be largely explained by different levels of trust, which are a function of the tools and mechanisms available to mediate disputes. You are going to trust people more if you believe that cheaters will be penalized somehow for their cheating.

In traditional societies, cheating is punished by repetitional mechanisms within the community. The courts have served this function in modern industrial societies, and have thereby facilitated industrialization at a massive scale. Smart contracts can serve a similar purpose in places where courts are unavailable or cannot be relied upon today.

> "Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives."

> No - they do not.

> No businesses on planet earth are going to allow their businesses to be managed outside the auspices of some kind of judicial oversight, and especially not in things that cannot be undone.

In some circumstances, it is better to have the option of taking a dispute to court. But even today in the US, most businesses try to avoid the courts and instead use arbitration to resolve disputes. In most of the third world, neither arbitration nor the government court system are available to most businesses.

Around the world, I think there are a lot of businesses that would prefer to completely eliminate the kinds of ambiguities in paper contracts that lead to disputes, by opting instead to use a smart contract to specify the mechanism of a transaction. If you don't see it being done already, that is because there is still a lot of infrastructure that needs to be built out.

> The world is full of accidents, misinterpretations.

> Every situation we see a 'smart contract' there is probably room for a market maker, and/or just some kind of simple software that 'implements' a regular contact.

Smart contracts are interpreted by machines, so there is no misinterpretation—if there is a problem, it is a problem with the implementation.

Sure, you could delegate the responsibility of encoding the terms of a paper contract to some third party. But then all parties need to agree on and trust that third party, and the third party itself needs to agree and accept some risk. A smart contract is a better solution because there is no third party involved. Everyone gets to read the smart contract before the transaction is performed, and if all agree, the terms are set.