Five Things To Know About Smart Contracts

Computer scientist and legal scholar Nick Szabo first proposed the idea of "smart contracts" in 1996. Szabo published his initial paper on the topic in a publication called Extropy, a journal of transhumanism, a movement seeking to enhance human intellect and physiology by means of sophisticated technologies. At the time, the idea was nothing if not futuristic.

Fast forward 22 years, and even if the actual use of smart legal contracts remains largely in the future, the idea of them has gone mainstream. What follows is our list of the top five things you need to know about this quickly evolving area.

1. Their Name Is Somewhat Confusing

When lawyers speak of contracts, they generally mean agreements that are intended to be legally enforceable. In contrast, when most people use the term "smart contract" they're not referring to a contract in the legal sense, but instead to computer coding that may effectuate specified results based on "if, then" logic.