A smart contract or smart contract is a type of contract between the buyer and the seller that works by writing the contract directly into the lines of code.
The code and contracts here are distributed; It is located on a decentralized blockchain network. The code controls execution; Transactions are traceable and irreversible. Smart contracts do not require a central authority, legal system or external enforcement mechanism; It allows for trusted transactions and deals to be made between separate, anonymous parties.
While blockchain technology is primarily thought of as the foundation of Bitcoin, it has gone far beyond supporting virtual currency. Smart contracts were first proposed in 1994 by American computer scientist Nick Szabo, who invented a virtual currency called “Bit Gold” in 1998, exactly 10 years before the invention of Bitcoin. There are also rumors that Szabo is actually the real Satoshi Nakamoto, the anonymous inventor of Bitcoin. However, we do not have precise information on this issue. Szabo defined smart contracts as software transaction protocols that execute the terms of the contract. He wanted to extend the functionality of electronic transaction methods such as he pos (point of sale) into the digital realm.
Szabo also proposed a contract for synthetic assets such as derivatives and bonds. The term “smart contract” is somewhat unfortunate; because how smart are smart contracts; nor should it be confused with a legal contract: A smart contract can only be as smart as the people who code it. All information available at the time of coding; While smart contracts have the potential to enforce legal contracts if certain conditions are met, we still need to solve a large number of tech-legal problems that require interdisciplinary discourse.
It is likely that we will see legal contracts and smart contracts converge as technology becomes more mature, pervasive, and legal standards are adopted.