A smart contract is a self-executing contract in which the terms of the agreement between buyer and seller are directly written into lines of code. The code and the agreements contained therein are stored and replicated on a blockchain network. Smart contracts allow for the automation of contract execution, as well as the management and tracking of contractual obligations.
One of the key advantages of smart contracts is that they can reduce the need for intermediaries, such as lawyers or brokers, to facilitate the performance of contracts. This can make the process of entering into and enforcing contracts faster, more efficient, and more secure.
Smart contracts are often associated with the blockchain technology that underlies cryptocurrencies such as Bitcoin, but they can also be used in a variety of other contexts, including supply chain management, real estate, and the Internet of Things.
The concept of smart contracts was first introduced by the computer scientist Nick Szabo in the 1990s, and the term was coined in 1994. However, it was not until the emergence of blockchain technology that smart contracts became a practical reality. Today, smart contracts are being used in a variety of industries and are expected to have wide-ranging implications for the way in which contracts are executed and enforced.