[atweiden]

> Usually the "Dole" case is the most famous example, where you have a publicly traded company with all the benefits of corporate record keeping, stock trusts and banks, and centralized stock exchanges, but when the buyer went to take it private low and behold the public company with all the centralized safe guards in the world should have had a total capitalization of 36M shared but somehow had about 49M share issued, it only ended up in $150M in damages, but this could not have happened using blockchain and most agree nearly every publicly traded company likely would have the same inconsistencies.

This sounds like a technology problem for which a public blockchain is but one possible solution. Surely other append-only log data structures exist which could step in to fill this void.

AFAICT the main issue with crypto equities — and all other similar constructs — is what happens when a court of law overrides them. If a court says your ex owns half of the shares in $WALLET, but the blockchain doesn’t, and $COMPANY which issued the shares is also subject to the whims of the court, then what are we to do about this?

OTOH maybe this rabbit hole really just never ends until courts are also somehow replaced by a public blockchain, likely at the behest of the very biased investors who stand to disproportionately profit from this game.

[throwaway_isms]

>This sounds like a technology problem for which a public blockchain is but one possible solution.

I don't disagree, and "blockchain" as used sort of is misleading because at this point their are many solutions within the blockchain technologies and it is still rapidly evolving.

>If a court says your ex owns half of the shares in $WALLET, but the blockchain doesn’t, and $COMPANY which issued the shares is also subject to the whims of the court, then what are we to do about this?

You could hold a non-complying party in jail/contempt of court for one, this happens with real world assets that do not get turned over now.

But again there are implementation of blockchain solutions, where say the Company that issued shares did so on a smart contract and with a Court order they could burn half the tokens/stock in the wallet mint that same number and transfer them to the wife per the Court order.

[atweiden]

> You could hold a non-complying party in jail/contempt of court for one, this happens with real world assets that do not get turned over now.

This doesn’t appear to resolve the issue of the blockchain reflecting a different reality than that decided by a court.

> But again there are implementation of blockchain solutions, where say the Company that issued shares did so on a smart contract and with a Court order they could burn half the tokens/stock in the wallet mint that same number and transfer them to the wife per the Court order.

How would this hypothetical court order be verified without the involvement of trusted third parties? Presumably judges in many places could be bribed or coerced into rubber stamping such an order.

This seems ripe for abuse.

[throwaway_isms]

>This seems ripe for abuse.

You proposed the hypothetical starting with the Court. If you want blockchain to preempt any court involvement your hypothetical needs to start at that point.

I think it is possible through the prisoners dilemma. Have husband and wife have a joint wallet from the beginning governed by smart contract with agreed upon prenuptial terms. Marital assets could go in and then upon divorce they be equally split, the husband and wife could be required signatures, but if only 1 signs the funds/assets are locked until both sign. Maybe in rare instance you get one partner willing to lockup the funds and sacrifice their own finances, but that the entire point of blockchain/miners and the prisoner's dilemma.

[atweiden]

What about people being sued for damages, or creditors laying claim to the assets? There are endless cases where a court can unilaterally decide your assets are not your assets any longer.

Also, your hypothetical solution to the blockchain not reflecting court orders in the narrow case of divorce law is to ensure every married buyer of a crypto equity has a prenuptual agreement in place in their crypto wallet. Can you think of any problems with that plan?

[throwaway_isms]

I can think of a problem when someone poses a hypothetical with a given set of facts, you propose one of many potential solutions, then they change the facts of the hypothetical. For example, someone asking about a dissolution of marriage and then complaining the solution was limited to "narrow case of divorce law" and adding in addition 3rd party creditors. Its well beyond the scope of any limited good-faith discussion on this forum but the court does not have jurisdiction and is not concerned about 3rd party creditor rights in a dissolution of marriage action, they may consider the debts themselves, but not the actual interest of the creditors vis-a-vis the marital assets. Though, at least in the US, there are 50 states with 50 different legal standards governing. I am a lawyer, but I am not your lawyer, good luck.

[atweiden]

If the blockchain manipulates balances according to the whims of a court, then manipulating the court becomes a potential source of revenue for anyone able to game the system.

But if the blockchain doesn’t manipulate balances according to the court, and the court decides half of your crypto equities in $WALLET now belong to someone else, then at that moment in time the blockchain’s account balances become inaccurate. These types of events happen not infrequently, which creates a problem.

Perhaps blockchain property titles will make my point easier for you to understand. Say you own the house at 187 Blue Kodiak Drive, and the title is an “NFT” recorded on the blockchain. The NFT must be respected (!). Then a court steps in and assigns ownership of 187 Blue Kodiak to a bank, because it turns out you haven’t been paying your mortgage. But wait, the blockchain still says you own the home at 187 Blue Kodiak Drive (!). However, you don’t own it anymore — not legally, not physically.

Now pretend the blockchain on which the 187 Blue Kodiak Drive house title is recorded dutifully obeys the commands of the court which in our previous example allowed the bank to repossess it. In our previous example, that’d be just fine — after all, you haven’t been paying your mortgage. But now the issue changes: The Pink Panther slides his way into the court one day, and one way or another convinces an decision-making authority there that you’ve sold him the home at 187. The Pink Panther is now in possession of the title, and you’re out of luck.

Ultimately, this criticism of smart property has been around for many years now. It wasn’t my intent to “surprise” you with it. However, people invested in tangentially related crypto systems tend to really struggle with this. That’s because public blockchains were never designed to track non-bearer assets which exist in in the real world. Unlike companies built by humans or real estate, the (public) blockchain exists only in cyberspace, and therefore any ownership data of company shares or real estate recorded on the blockchain can only ever be an approximation of the truth. Permissioned blockchains — or simple databases for that matter — tend to be a better fit for situations such as this. The issue with them is they don’t take investors.