Smart Contract


The legal validity of contracts on paper is currently attested to by notaries. And it is lawyers and courts who ensure that they are adhered to. Smart contracts are in some respects the agreement, the notary public, the lawyer and the court bailiff all rolled into one. The computer logs can be, but are not auto­matically, legally binding. A smart contract is in some respects a computer code that runs autonomously on the blockchain as soon as a certain condition is met. Agreements or contracts between business partners can in this way be handled quickly, auto­matically and securely, all without a central intermediary. They are “smart” because the agreements review them­selves to make sure that their conditions are being met. If, for instance, I use a smart contract to hire out my net­worked car and the hirer doesn’t pay the bill, the car won’t start.