So far this thread has only been scratching the surface when it comes to the potential of smart contracts.

The guitar example is really understating the value of a smart contract. It's just trading objects and fair enough, that's when liquidity becomes a problem.  

But a large part of the digital economy comes from commission-based freelancing. Web-design, copy-writing, affiliate marketing, coding, graphic and concept artist and what not. All these custom-made services are much less tangible than a guitar.  

If you want to hire someone to design your website, your deal only ends when you're satisfied. If you are hired to design a website, then your deal only ends when you're paid.

That means that for this type of work, smart contracts are a godsend.

Check this website:
http://clientsfromhell.net/  

Every single one of these horror stories can be avoided by smart contracts. That's because smart contracts give both parties the incentive to uphold their part of the bargain to the best of their abilities. It's not about a 'he said she said' issue with a broken guitar or a box filled with phonebooks.

It's about "Hey I like the site so far but our contract also says that the member profile section has to be finalised. If you finish it this week we can both release each other's eskrow, if you think you're not getting it done we can just pay for the finished part for 80% and make a new contract for the member profile section part."  

These deals need a lot of communication and this can only truly be done when both parties have leverage on each other.