What Is a Smart Contract and How Does It Work? A Beginners Guide

A smart contract is a computer program that automatically carries out the terms of an agreement once certain conditions are met. The contract lives on a blockchain, which means it’s decentralized, secure, and can’t be tampered with. Unlike traditional contracts, you don’t need a lawyer, middleman, or notary to enforce the deal. The code takes care of everything.

History of Smart Contracts

The idea behind smart contracts was first proposed by a computer scientist named Nick Szabo in the 1990s. Szabo published a paper where he described smart contracts as a way to digitally formalize and automate the performance of contracts. His goal was to reduce reliance on intermediaries and create agreements that could self-execute based on pre-defined rules. However, his idea remained theoretical.

Later in 2009, with the introduction of Bitcoin and blockchain, transactions were processed without the need for a central authority. However, it did not have the flexibility to support complex smart contracts. Later, with the arrival of Ethereum in 2015, it served as a platform for dApps and fully programmable smart contracts. However, in 2016, Ethereum witnessed an attack aft…

The post What Is a Smart Contract and How Does It Work? A Beginners Guide appeared first on Coin Edition.