A recent paper by New York University School of Law professors Max Raskin and Jack Millman, published in the Journal of Emerging Technologies, delves into the application of blockchain-based smart contracts to foster what they term "The legality of personal growth bets."
In essence, personal growth bets are one-sided contracts individuals make with themselves, typically aimed at self-improvement or behavior modification within a specified timeframe. These contracts might involve quitting smoking or losing weight. As an example, the paper outlines a scenario: "If Max doesn't lose 10 pounds in the next six months, he must pay Jack $1,000. However, if he does lose weight, Jack must pay Max for a steak dinner."
The core premise of the paper posits that incentives can significantly enhance an individual's motivation to achieve challenging personal goals. Still, without a system of accountability, these incentives are often ineffective.
This is where smart contracts come into play, serving as both executors and overseers, enabling individuals to effectively hold their future selves accountable without external involvement. The authors propose a model where smart contracts are created on the blockchain using "contract software," essentially hardware that monitors conditions for the bet and ensures compliance with the contract's terms. As an illustration, if someone aims to quit smoking and invests $10,000 in a smart contract, the contract might stipulate that the individual must remain smoke-free for 30 days to regain their funds. If they fail, the contract could automatically donate the funds to a predetermined charity.
The enforcement of these contract terms could involve users confirming compliance through devices like a carbon monoxide breathalyzer, which can detect the presence of cigarette smoke in the breath, akin to an alcohol breathalyzer measuring blood alcohol concentration. Failure to adhere to the contract's conditions could lead to the automatic execution of its terms, potentially forfeiting the user's rights and assets.
Although the concept seems straightforward, the legalities and enforceability of self-contracts remain somewhat uncertain. Raskin and Millman argue that there should be no legal impediment to individuals staking their financial resources on their self-improvement schemes. So long as the terms are legally considered, these contracts should, in theory, hold legal weight. However, they acknowledge that certain limitations might be necessary, especially given the autonomous nature of smart contracts.
The paper also explores a hypothetical scenario involving an individual willing to go to extreme lengths, like implanting a self-destructive device, to demonstrate their commitment to repaying a loan. In this case, the contract's terms might include "infinitely high costs of rescission by the debtor." Yet, it's noted that such contracts may face legal challenges due to laws addressing both suicide and anti-suicide measures.
