Stephan Tual, CCO of Ethereum project, penned this helpful article outlining some of the possibilities of the new technology. I recommend you read it.
In my own words, Ethereum can do to lawyers what Bitcoin is doing to bankers. Which is to say, Bitcoin exposes the inefficiency and inequality of a centralised banking system issuing debt money for profit. Central banks have responded with a coordinated public drubbing, and by erecting legal and financial barriers to Bitcoins free movement, thus preventing it from being either a currency or a tool for libertarians.
Meanwhile the same libertarian dream persists but with Ethereum as its new subject. You don't have to be Ray Kurzweil to predict efficiency gains for a society managed with transparent blockchain technologies. But as the Bitcoin dream becomes buried in legislation, we should be asking deeper questions about went wrong, whether it is salvageable, and how Ethereum might be similarly vulnerable.
What went wrong?
Bitcoin has met a similar fate to e-gold, because it was a similar design. We cannot disintermediate the banking system and stay alive and out of jail. What went wrong was that Bitcoin as a currency was practically designed to create wild speculation, and it was the spectacular gains which made Bitcoin such a sensation in the first place. The libertarian potential then seemed so much larger, but making money from speculation is, and remains always more appealing than going to jail. Taking on a global cartel to win economic freedom requires courage and sacrifice, not merely an internet protocol and a lot clever developers
Is Bitcoin salvageable?
A lot of people are still building out the infrastructure, but I'm not sure what they intend, now that Bitcoin isn't a currency. Perhaps they plan to operate from BTC friendly countries? When people are ready for liberty, they will use whatever tools are at hand. Bitcoin is still at hand.
How is Ethereum similarly vulnerable?
We can hope that Ethereum's internal currency, Ether, won't be subject to the same speculation that Bitcoin was. And Ethereum itself cannot really be regulated. Ideally the world's governments would say - "at last! a chance to be properly transparent and accountable to the People" But more likely Ethereum contracts will have to carve out their own niche in common law in order to have any legal validity at all. One day someone will be unhappy with a smart contract and will take it to the national court. The court will rule that Ethereum contracts are subject to national laws, and amount to nothing more than a private agreement. The libertarian dream will die right there, and ethereum will be relegated to a transparent accounting platform for social businesses and NGOs. Most of the efficiency gains will go, as always, to the 0.01% and life will carry on as usual.
Humanity faces a number of challenges, namely rent-seekers, interest on money, obligatory taxes, warmongering governments, snooping security services and catastrophic climate change. Therefore I call on Stephan and all the Ethereals to outline whether and how Ethereum might help us, the people, to address these pressing challenges.