Smart contract is a a term that may sound very difficult to understand to people who are just learning about blockchain, but really it’s not. It has also become a popular term in the software development space because of the high demand for skilled engineers in that space.
What Then Is Smart Contract?
It is a type of contract execution that is done autonomously with terms and agreement of the contract between buyer and seller plainly encrypted. The encryption of agreement is lives across a decentralized, distributed blockchain network. The execution is controlled by the encryption while transactions are trackable and irreversible.
Smart contract allows transaction to be carried out anonymously between parties without the required traditional authorities (legal).
According to Investopedia, this is what you need to know:
- Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.
- Nick Szabo, an American computer scientist who invented a virtual currency called “Bit Gold” in 1998, defined smart contracts as computerized transaction protocols that execute terms of a contract.
- Smart contracts render transactions traceable, transparent, and irreversible.
Is Nick Szabo the real Satoshi Nakamoto?
This is a rumor that he himself has denied. But haven proposed the term “smart contract’ in 1994 and as a computer scientist invented a virtual currency called “Bit Gold” (fully 10 years before bitcoin), his plan where vivid. Which amount to digitization of the functionality of the electronic transaction methods, such as our traditional POS (point of sale).