The advantages of blockchain technology are built on the assumption that "the code is the law" works for some use case. The code is not the law. The law is the law.
For example, take property title insurance, which I used to think was an interesting use case for blockchain. After all, the title insurance industry exists to make sure that the chain of ownership from sellers to buyers is valid and not mistaken or fraudulent. This is, like, the whole reason for being of blockchain--"provable" transactions.
But here's the thing: no blockchain system will ever be able to prove that its own data inputs are correct. If something happens outside the system that is not entered or if some data is input incorrectly, well, garbage in, garbage out. But the law is still the law.
For example, when my family sold some farmland, the land under the homestead was incorrectly titled as being in the sold land such that our neighbors suddenly "owned" my mother's home and started receiving her property tax bills. Title insurance was an important tool for ironing out the mistake (as were things like trust and goodwill between neighbors and institutions, which blockchain supposedly obsoletes), and a cryptographically-secured immutable ledger would have been an active hindrance in the process.
Another occasional use case for title insurance is for something like messy estates. Could blockchain prevent someone from coming forward and proving that they are the rightful owner of my home because they are the long-lost true heir from a secret second family of a previous owner? No, the blockchain is only as good as the data on it.
So provable ownership is there to resolve ownership in the corner cases where ordinary security and record-keeping fail, but... it also fails in those same corner cases, but irreversably and without the protections that the law provides against theft, data-entry mistakes, fraud, etc., which are the comforts of democratic institutions that most of us have become accustomed to.
At best, there may be "web3" use cases where just laws don't exist, in extreme authoritarianism or anarchy where freedoms aren't otherwise protected. As a techno-optimist, I'm somewhat predisposed to this view, but so far committed authoritarians haven't had a lot of trouble suppressing "censorship-resistant" technology. For better or for worse, the law is the law.
"and a cryptographically-secured immutable ledger would have been an active hindrance in the process" ... "...it also fails... irreversably and without the protections that the law provides against theft, data-entry mistakes, fraud, etc."
I'm still agnostic on whether web3 is good or bad or whether block chain is good for title insurance, so my observations here are not arguments in favor of block chain. I do want to respectfully disagree with this assertion, though.
In a world where people have become used to this technology and understand its limitations, the ledger would only reflect that there had been a mistake, and a later correction would clear it. That the mistake cannot be erased does not mean that it cannot be corrected.
The record being on a block chain rather than a paper ledger in a file drawer or in a database somewhere has no bearing on the human side of it.
The rightful claimant can still come forward, the clerical error can still be undone, the goodwill can still be extended. Likewise, with the system that happens now, fraud and injustice and theft still happens, and it's not less easy without blockchain.
Yes there is a sense in which, theoretically, a false transaction could be recorded as reversed on the blockchain in the same way that general ledger accounting works now. The problem with blockchain systems is that no one has the authority to do so.
Consider current payment systems. If I mistakenly make a credit card transaction to the wrong recipient or if someone scams me into making such a payment or if someone steals my credit card number and makes such a transaction for me, everything is still going to be okay because the law requires that these transactions be easily reversible. (In effect, this just adds more lines to the ledger, just like you described above in reference to blockchain.)
On the blockchain, if I make a mistaken payment (etc) I have no recourse because no one has the authority to reverse the transaction except the recipient, who won't generally want to do so.
That's what I meant by the law having protections that the blockchain does not.
Maybe DLT conflicts with your views on how the world should be in general. That's fine and nobody should be forced to actually taking part in any web3. Some people like anarchy, others like authority and some like the middle ground. Depending on what you fancy blockchains do or don't fit.
Building protective smart contracts that even exceed what the law could grant and enforce for a citizen is doable though.
Literally no computing system can be better than its own data inputs, though, which is my whole point. Like, that's not a subjective value or a preference. That's just provable.
For example, smart contracts can assure me that if I pay money into a system, I will get the NFT that I intend to buy (assuming I am the one who initiated the transaction and not someone who has stolen my key and assuming I didn't fatfinger the transaction) but they can't prove that the actual originator of the artwork is the originator of the NFT, which is why there are so many fake NFTs.
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The advantages of blockchain technology are built on the assumption that "the code is the law" works for some use case. The code is not the law. The law is the law.
For example, take property title insurance, which I used to think was an interesting use case for blockchain. After all, the title insurance industry exists to make sure that the chain of ownership from sellers to buyers is valid and not mistaken or fraudulent. This is, like, the whole reason for being of blockchain--"provable" transactions.
But here's the thing: no blockchain system will ever be able to prove that its own data inputs are correct. If something happens outside the system that is not entered or if some data is input incorrectly, well, garbage in, garbage out. But the law is still the law.
For example, when my family sold some farmland, the land under the homestead was incorrectly titled as being in the sold land such that our neighbors suddenly "owned" my mother's home and started receiving her property tax bills. Title insurance was an important tool for ironing out the mistake (as were things like trust and goodwill between neighbors and institutions, which blockchain supposedly obsoletes), and a cryptographically-secured immutable ledger would have been an active hindrance in the process.
Another occasional use case for title insurance is for something like messy estates. Could blockchain prevent someone from coming forward and proving that they are the rightful owner of my home because they are the long-lost true heir from a secret second family of a previous owner? No, the blockchain is only as good as the data on it.
So provable ownership is there to resolve ownership in the corner cases where ordinary security and record-keeping fail, but... it also fails in those same corner cases, but irreversably and without the protections that the law provides against theft, data-entry mistakes, fraud, etc., which are the comforts of democratic institutions that most of us have become accustomed to.
At best, there may be "web3" use cases where just laws don't exist, in extreme authoritarianism or anarchy where freedoms aren't otherwise protected. As a techno-optimist, I'm somewhat predisposed to this view, but so far committed authoritarians haven't had a lot of trouble suppressing "censorship-resistant" technology. For better or for worse, the law is the law.
I'm still agnostic on whether web3 is good or bad or whether block chain is good for title insurance, so my observations here are not arguments in favor of block chain. I do want to respectfully disagree with this assertion, though.
In a world where people have become used to this technology and understand its limitations, the ledger would only reflect that there had been a mistake, and a later correction would clear it. That the mistake cannot be erased does not mean that it cannot be corrected.
The record being on a block chain rather than a paper ledger in a file drawer or in a database somewhere has no bearing on the human side of it.
The rightful claimant can still come forward, the clerical error can still be undone, the goodwill can still be extended. Likewise, with the system that happens now, fraud and injustice and theft still happens, and it's not less easy without blockchain.
Yes there is a sense in which, theoretically, a false transaction could be recorded as reversed on the blockchain in the same way that general ledger accounting works now. The problem with blockchain systems is that no one has the authority to do so.
Consider current payment systems. If I mistakenly make a credit card transaction to the wrong recipient or if someone scams me into making such a payment or if someone steals my credit card number and makes such a transaction for me, everything is still going to be okay because the law requires that these transactions be easily reversible. (In effect, this just adds more lines to the ledger, just like you described above in reference to blockchain.)
On the blockchain, if I make a mistaken payment (etc) I have no recourse because no one has the authority to reverse the transaction except the recipient, who won't generally want to do so.
That's what I meant by the law having protections that the blockchain does not.
Maybe DLT conflicts with your views on how the world should be in general. That's fine and nobody should be forced to actually taking part in any web3. Some people like anarchy, others like authority and some like the middle ground. Depending on what you fancy blockchains do or don't fit.
Building protective smart contracts that even exceed what the law could grant and enforce for a citizen is doable though.
Literally no computing system can be better than its own data inputs, though, which is my whole point. Like, that's not a subjective value or a preference. That's just provable.
For example, smart contracts can assure me that if I pay money into a system, I will get the NFT that I intend to buy (assuming I am the one who initiated the transaction and not someone who has stolen my key and assuming I didn't fatfinger the transaction) but they can't prove that the actual originator of the artwork is the originator of the NFT, which is why there are so many fake NFTs.