In the digital currency realm, smart contracts have enhanced the financial industry through tokenization, decentralized finance (defi) and other agreements in the form of self-executing code. But how exactly do they work? What benefits do they offer? Here’s a concise overview of smart contracts and their profound effect on trust and collaboration in our interconnected society.
Smart Contract Origins
If you keep up with cryptocurrency news you’ve likely heard of “smart contracts.” Smart contracts, in their current form, are self-executing agreements housed on a blockchain.
Fundamentally, the “smart” in smart contracts stems from automation, while the “contract” denotes a binding agreement or function that runs automatically. The idea of smart contracts was first posited by American computer scientist Nick Szabo.
Ethereum’s Role & Beyond
In the early 1990s, Szabo defined smart contracts as “a set of promises, specified in digital form, including protocols within w
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