Smart contracts are computer programs designed to run automatically as the people or companies involved in an agreement comply with its clauses..
To understand what a smart contract is, we must first remember what a contract means. A contract is nothing more than an agreement between two or more parties, an environment where what can be done is defined, how it can be done, what happens if something is not done. In other words, some rules of the game that allow all the parties that accept it to understand what the interaction they are going to carry out will consist of..
Until now contracts have been verbal or written documents. These documents are subject to the laws and territorial jurisdictions, and sometimes require notaries. That is, more costs, time and third parties involved in the process. Because of this, they are not accessible to everyone. And this is not the worst: the contents of contracts may be subject to interpretation..
On the other hand, a smart contract is capable of executing and enforcing itself, autonomously and automatically, without intermediaries or mediators. They avoid the burden of interpretation by not being verbal or written in the languages we speak. Smart contracts are 'scripts' (computer code) written with programming languages. This means that the terms of the contract are pure statements and commands in the code that forms it..
On the other hand, a smart contract can be created and called by natural and/or legal persons. But also by machines or other programs that work autonomously. A smart contract is valid without depending on authorities. This is due to its nature: it is a code that is visible to all and cannot be changed as it exists on blockchain technology. This gives it a decentralized, immutable and transparent character..
It is important to note that, as it is distributed over thousands of computers, it prevents a large company from keeping them safe, which eliminates bureaucracy, censorship and the large costs and time implicit in this process which, by the way, until now is the safekeeping ..
If we combine the principles of a smart contract with the creativity of many developers on the planet, the result is never-before-seen possibilities, accessible to everyone and at costs that are close to free. Ecosystems without authoritarian figures that submit their members to their will. We talk about a fairer world..
As the security of transactions is guaranteed through blockchain technology, smart contracts can operate automatically, which means that verification by a supervisory entity is not necessary. It will suffice to indicate in a computer program what is the result that has to be executed after a certain event occurs, that is to say: if X occurs then Y..
It is essential that each of the parties involved in the contract know and accept in advance the rules and the steps that are going to be executed, since once the execution of the smart contract begins, the programmed rules cannot be altered. Each step or clause formed is registered in the blockchain and cannot be modified..