Smart contract

This article is about contractual transactions on a decentralized platform. For smart legal contracts, see Smart legal contract.

A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement.[1][2][3][4] The objectives of smart contracts are the reduction of need for trusted intermediators, arbitration costs, and fraud losses, as well as the reduction of malicious and accidental exceptions.[5][2] Smart contracts are commonly associated with cryptocurrencies, and the smart contracts introduced by Ethereum are generally considered a fundamental building block for decentralized finance (DeFi) and non-fungible token (NFT) applications.[6][7]

The original Ethereum white paper by Vitalik Buterin in 2014[8] describes the Bitcoin protocol as a weak version of the smart contract concept as originally defined by Nick Szabo, and proposed a stronger version based on the Solidity language, which is Turing complete. Since Bitcoin,[clarification needed] various cryptocurrencies have supported programming languages which allow for more advanced smart contracts between untrusted parties.[9]

A smart contract should not be confused with a smart legal contract, which refers to a traditional, natural-language, legally-binding agreement that has selected terms expressed and implemented in machine-readable code.[10][11][12]

  1. ^ Röscheisen, Martin; Baldonado, Michelle; Chang, Kevin; Gravano, Luis; Ketchpel, Steven; Paepcke, Andreas (1998). "The Stanford InfoBus and its service layers: Augmenting the internet with higher-level information management protocols". Digital Libraries in Computer Science: The MeDoc Approach. Lecture Notes in Computer Science. Vol. 1392. Springer. pp. 213–230. doi:10.1007/bfb0052526. ISBN 978-3-540-64493-4.
  2. ^ a b Fries, Martin; P. Paal, Boris (2019). Smart Contracts (in German). Mohr Siebeck. ISBN 978-3-16-156911-1. JSTOR j.ctvn96h9r.
  3. ^ Savelyev, Alexander (14 December 2016). "Contract Law 2.0: "Smart" Contracts As the Beginning of the End of Classic Contract Law". Social Science Research Network. SSRN 2885241. Archived from the original on 24 March 2020. Retrieved 24 May 2020.
  4. ^ Tapscott, Don; Tapscott, Alex (May 2016). The Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World. Portfolio/Penguin. pp. 72, 83, 101, 127. ISBN 978-0670069972.
  5. ^ Szabo, Nick (1997). "View of Formalizing and Securing Relationships on Public Networks | First Monday". First Monday. doi:10.5210/fm.v2i9.548. S2CID 33773111. Archived from the original on 2022-04-10. Retrieved 2020-05-24.
  6. ^ Zhou, Haozhe; Milani Fard, Amin; Makanju, Adetokunbo (2022-05-27). "The State of Ethereum Smart Contracts Security: Vulnerabilities, Countermeasures, and Tool Support". Journal of Cybersecurity and Privacy. 2 (2): 358–378. doi:10.3390/jcp2020019. ISSN 2624-800X.
  7. ^ "All You Need to Know About NFT Smart Contracts". Binance.com. Binance. Archived from the original on 26 September 2022. Retrieved 26 September 2022.
  8. ^ "White Paper· ethereum/wiki Wiki · GitHub". GitHub. Archived from the original on 11 January 2014.
  9. ^ Alharby, Maher; van Moorsel, Aad (26 August 2017). "Blockchain-based Smart Contracts: A Systematic Mapping Study". Computer Science & Information Technology: 125–140. arXiv:1710.06372. doi:10.5121/csit.2017.71011. ISBN 9781921987700. S2CID 725413.
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  12. ^ Cite error: The named reference jit202009 was invoked but never defined (see the help page).