Smart Contracts

Jessica Schaedler, Back to basics: Smart contracts, STEP Journal (Vol31 Iss4), p.19 - In 1994, the inventor of the ‘smart contract’, Nick Szabo, defined the term as a ‘computerised transaction protocol that executes the terms of a contract’.

The transaction protocol works with algorithms following an ‘if-then’ logic.
When we talk about smart contracts now, we refer to a computer protocol run on a decentralised blockchain system, usually the Ethereum blockchain, which allows automated (i.e., self-executing) contract execution between two or more parties with previously coded data. As with all data on a blockchain, the distinct features and current legal limitations of smart contracts are theoretical immutability, perpetuity,
decentralisation and encryption.

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