What Are Smart Contracts? A Guide to Automated Agreements in Blockchain
Think about purchasing a home, obtaining a loan, and obtaining insurance without having to wait days for documents, paying high brokerage charges, or fearing the other party will back out. This is the promise that smart contracts make. The concept of these digital protocols was originally proposed by computer scientist and cryptographer Nick Szabo in 1994, and then materialized on the Ethereum blockchain in 2015. Today they lay the foundation of decentralized networks, revolutionizing the way modern business transactions work and build trust. What is a Smart Contract? (Direct Answer) A smart contract is an automatic digital contract written into lines of code and kept on a distributed network of computers on a blockchain. It will automatically verify, enforce, and execute the terms of a contract when certain predetermined conditions are fulfilled, without involving third-party handlers—a bank, lawyer, or broker. How Smart Contracts Work: The Three Core Functions Smart contracts are bui...