Are smart contracts AI-complete?

In b-money I had envisioned that a common type of contract would be one where all the participants, including a third-party arbitrator, deposit funds into an escrow account at the start, which can only be released at the end of the contract with the unanimous agreement of all the contracting parties. So the arbitrator would make judgments on performance and damages, and be incentivized to be fair in order to protect their reputation and not lose their own deposit, and the other parties would be incentivized to accept the arbitrator's judgments since that's the only way (short of direct account adjustment by everyone, aka forking) to get their escrow funds out.

Not exactly the kind of "the code is the contract" smart contracts that some people are so excited about, and I have to say I don't quite understand the excitement. Without an AI that can live on the blockchain and replace human judgments, smart contracts are restricted to applications where such judgement are not required, and there doesn't seem to be many of these. Even when contracting for the production and delivery of digital goods, we still need human-like judgments when disputes arise regarding whether the goods delivered are the ones contracted for (except in rare cases where we can mathematically define what we want, like the prime factors of some integer).

ok, for some context here, I think a lot of people are getting hung up on the words "contract" or "smart contract".

If we want to talk about it intelligently it helps to taboo the term "contract" or else people get terribly terribly confused like in some of the existing comments.

I'm going to say "independent program" instead of "smart contract" for clarity

Ethereum allows for the existence of independent programs which can hold and transfer money. The rules have to be hardcoded into them when you create them. They cannot be changed once launched.

For example if you wanted to create a prize fund for people who've factored large numbers you could create an independent program which accepts a set of numbers, decides if they're the prime factors of another number and if it is then it transfers a prize fund to the first person to do so.

Years later, someone factors the number, connects and gets their payment.

You might be a thousand years dead but the independent program is still in the system and has control of the funds.

Depending on how you write it you may even not be able to retrieve the funds yourself without solving the problem.

It doesn't matter if a court orders you to pay out because they have a law declaring pi to be exactly three and someone has come forward with a kooky proof for their "factored" number. If it doesn't match the rules of the program there's nothing you or the court can do.

If you've not given yourself control at the start it will sit there until the end of time until someone actually factors the number.

Or perhaps you set up the program badly and it will accept numbers which aren't the factors as correct and gives a payment to someone who's not factored anything.

it is not a legal contract which says "I will give money to the person who solves this problem", it's a piece of code which, when followed, may give the money in it's control to someone who connects to it depending on the rules programmed into it.

Some funds have been set up controlled by independent programs and their "about" pages tend to say something along the lines of "you're agreeing to the code being followed, anything we write here is just our best try at explaining what the code does, here is the full source code, if you're happy with this then you're free to give control of some funds to this code or a copy of this code"

AI is complex. Complexity means bugs. Bugs in smart contracts are exactly what you need to avoid.

What is needed the most is mathematically proving code.

For certain contract types you're going to need some way of confirming that, say, physical goods have been delivered but you gain nothing my adding AI to the mix.

Without AI you have a switch someone has to toggle or some other signal that someone might hack. With AI you just have some other input stream that someone might tamper with. Either way you need to accept information into the system somehow and it may not be accurate. AI does not solve the problem. It just adds complexity which makes mistakes more likely.

When all you have is a hammer, everything looks like a nail, when all you have is AI theories everything looks like a problem to throw AI at.

What do you mean by full AI?

For instance, if the contract is triggered by the delivery of physical goods - how can you define what the goods are, what constitutes delivery, what constitutes possession of them, and so on.

With the internet of things physical goods can treat their owner differently than other people. A car can be programmed to only be driven by their owner.

Reputation and escrow are also mechanisms that can be used. SilkRoad managed delivery of physical goods via reputation and escrew. SilkRoad did however had central servers that could be attacked. An Ethereum based system couldn't be taken down in a similar way.

Haven't people been making contracts for a pretty long time? What is this new 'smart contract' thing and how is it unique?

in a way that's already illegal.

Someone cracking a smart contract wouldn't really mind the law.