SMART CONTRACT

Who created and who uses them

Smart contracts were first described by Nick Szabo, a computer scientist and cryptographer, in 1996. Over the course of several years, Szabo reworked the concept and released several publications, where he described the concept of establishing contract law related business practices through the design of electronic commerce protocols between strangers on the Internet.

However, the implementation of smart contracts didn’t happen until 2009, when the first cryptocurrency Bitcoin appeared along with its Blockchain, which finally provided a suitable environment for smart contracts .

Smart contracts allow the performance of credible transactions without third parties. Smart contracts are an extremely young technology. .

What are the benefits of Smart Contracts?

The benefits of smart contracts go hand-in-hand with blockchain.

Trust: Smart contracts automatically execute transactions following predetermined rules, and the encrypted records of those transactions are shared across participants. Thus, nobody has to question whether information has been altered for personal benefit.

Speed and accuracy: Smart contracts are digital and automated, so you won’t have to spend time processing paperwork or reconciling and correcting the errors that are often written into documents that have been filled manually. Computer code is also more exact than the legalese that traditional contracts are written in.

Security: Blockchain transaction records are encrypted, and that makes them very hard to hack. Because each individual record is connected to previous and subsequent records on a distributed ledger, the whole chain would need to be altered to change a single record.

Savings: Smart contracts remove the need for intermediaries because participants can trust the visible data and the technology to properly execute the transaction. There is no need for an extra person to validate and verify the terms of an agreement because it is built into the code.