This may be the next big thing in technology. Something huge.
Ethereum is targeting the law. If successful, Ethereum will destroy the legal system as we know it. Judges and lawyers will go away, just as so many professions have already gone.
But not only the law, politics as well will become more or less obsolete. The financial system will be but a small collateral victim here.
Consider this:
http://etherscripter.com/what_is_ethereum.html
Perhaps, this instance of technology will not yet work well enough, but then the next instance or some later, will.
It will be quite a tremendous “hostile takeover”, where almost nobody has imagined it possible. But secured digital contracts will be a much better way than the present legal system.
Not only has your mobile-computer killed your video-camera and about twenty other gadgets, it will also kill your favourite state.
protokol2020 
In theory, nothing new – automated enforcement of law is in use for traffic violations for many years (speeding tickets, red light…):
if(speed > max_allowed_speed)send_ticket_for(speed – max_alloved_speed)
But in practice, even the best automation isn’t enough. I think there always will be cases where human intervention (or intelligence) should intervene.
p.s.: in fact people make the contracts more complicated than they should be. E.g. if one sells a car this sentence is enough: [seller] sold a car to [buyer] on [date] for [amount]. Two signatures and that’s it.
Take for example rent-a-car case. One is speeding above of what has been agreed for that kind of road. Or the car isn’t able to provide enough speed for this or that piece of the road network.
Or any other million possible circumstances, where the rent-a-car owner and the driver might be in a conflict.
The all present Ethereum will calculate the fees for each side of the deal in the real time. In a way, that neither side will not need to sue after the tour. Whoever will sue, will probably lose.
Say, that the customer wants to go somewhere, where the car owner don’t need to know. But still he must be sure that this is not out of the previously agreed road conditions. Ethereum, well encrypted machine is to deliver that confidence to both sides. Not revealing any private details.
You can break down any agreement as much as is needed. Say, you want a billion dollar credit, to build a giant ship. The bank has no clue if your half built ship is any good or it isn’t. They have no knowledge, but they do deserve some information what it is going on. To stop or to even extend the credit line.
Until now, this was pretty much impossible. But with the Ethereum shall be. There is an interesting piece of mathematics which enables us to built arbitrary safe contracts. And not only arbitrary safe, but also arbitrary complex.
It will be possible to have a permanent location alibi, without revealing where exactly you actually were. An (Ethereum based) agency can constantly collect your whereabouts, encrypts them and in the case of a murder somewhere, you can show the police you couldn’t be the murderer. But only, if you weren’t. You may be very close to the murder when happened, but a function result from your recorded moves proves that it couldn’t be you. Even without showing the police, that you were robbing a bank then.
When another police institution is going to ask you about this bank hoist, well, then you will not be able to provide a digital alibi.
I once thought that this kind of contracts will be possible when the quantum contracts will be practical. But I was wrong. With the secure encryption is already possible to do this magic.
It was about time for technology to finally endanger our governments and make them virtually useless.
Rent a car case – no need to sue even now. The identify request goes to rent-a-car company and then the fine is automatically given to identified driver.
Here is the simple contract:
switch(contract){
case ‘finished’: pay
case ‘not finished’: do not pay
default: houston we have a problem
}
1. the problem is that we can’t define all cases
2. most of the arguments are not about the content of “case”, but if the “case” occured or not
It’s a start. But we need strong encryption to be able, to make a galaxy of contracts, which will render the states very much obsolete.
When every vague contract will be replaced with a secured code, it will happen quite rapidly, I guess.
The security should become much, much stronger, though.