NYU law professors argue ‘personal growth bets’ using smart contracts should be legal


New York University School of Law professors Max Raskin and Jack Millman recently published a paper in the Journal on Emerging Technologies discussing the legalities surrounding the use of blockchain-based smart contracts for the purpose of “personal growth bets.”

According to the duo, personal growth bets are single-party contracts that people would engage in with themselves. The purpose of these contracts would generally be for the purpose of self-improvement — to either start or stop a certain act during a given period of time or by a certain date.

The researchers use the notions of quitting smoking or losing weight to describe the concept. Per their paper:

“For example, a rough outline of such a bet would be: if Max does not lose 10 pounds over the next six months, he must pay Jack $1,000. Whereas, if he does lose the weight, Jack must buy Max a steak dinner.”

The core argument of the paper, according to the researchers, is that incentives can have a positive impact on a person’s ability to succeed at difficult personal undertakings. However, without accountability, such incentives are less likely to work.


Smart contracts can “serve the roles of enforcer and monitor, allowing an aspirant to effectively bind his future self without the need to involve another person,” according to the authors.

Raskin and Millman propose a scheme where a smart contract is conceived on the blockchain using “contractware,” hardware used to measure or monitor the conditions of the bet, to enforce compliance with the contract’s terms.

In the case of quitting smoking, the researchers give the example of a person who places $10,000 in a smart contract that requires the user to remain smoke-free for 30 days in order to reobtain the funds. In the event of failure, the funds could, for example, be sent to a predefined charity of the user’s choice.

In order to enforce the terms of the “bet,” the researchers envision a system wherein a user would confirm compliance through the use of a carbon monoxide breathalyzer — a gadget that can detect cigarette smoke on breath in much the same way an alcohol breathalyzer determines blood-alcohol level.

If the user missed a designated check-in or failed a breathalyzer test, the terms of the smart contract would execute autonomously, and thus, the user’s stake would be forfeited.

While the concept is relatively straightforward, the legalities surrounding self-contracts and their enforceability are somewhat nebulous. The researchers claim there should be no legal impedance preventing people from tying up their own financial resources in a scheme to bet on themselves, and provided the terms are given legal “consideration,” such a contract should ostensibly be legally binding.

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“[T]here is no law against an individual giving his money away,” write the researchers. However, they go on to point out that there should be limits to what one can use as a stake, especially when considering the autonomous nature of smart contracts.

The paper also considers the hypothetical case of an investor “willing to install a bomb in his skull” in order to demonstrate the peson’s willingness to pay back a loan “such that it would explode if he missed a payment or tried to remove it.”

According to the research, this would be deemed a form of “strong” smart contract — as its terms contain an “infinitely high cost of revocation to the debtor.” However, the paper also indicates such a contract likely wouldn’t be legal as a self-contract due to the “many laws against suicide and promoting suicide.”

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