Origin Of Smart Contracts


Smart contracts were first proposed by Nick Szabo in 1996 as a way to facilitate, verify, and enforce the negotiation or performance of a contract.

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Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a decentralised blockchain network and are enforced by network participants through cryptography. Essentially, smart contracts allow for trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, third party, or arbitrator. 

 

Smart contracts were first proposed by Nick Szabo in 1996 as a way to facilitate, verify, and enforce the negotiation or performance of a contract. Szabo recognized that the decentralised nature of the then-emerging internet could enable the enforcement of contracts without the need for a central authority. With the advent of blockchain technology, smart contracts have become a reality, and are being used to execute a wide variety of transactions and agreements. 

 

The use of smart contracts can potentially eliminate the need for middlemen, reduce transaction costs, and increase efficiency and transparency. For example, a smart contract could be used to automatically sell or trade a security when certain conditions are met, such as the achievement of a certain price target. Smart contracts could also be used to streamline the process of issuing and trading shares in a company, or to automatically release funds from escrow when a purchase is made. 

 

While smart contracts hold great promise, they are not without risk. For example, because smart contracts are self-executing and cannot be reversed, it is important to ensure that the terms of the contract are accurately coded. In addition, smart contracts are still subject to the same hacking risks as any other computerised system. As such, it is important to take precautions to protect against potential cyber threats.

Feel free to contact us if you are looking for Smart Contract Development Services. We are eager to learn further about your project requirements.

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