Role of Smart Contracts on Blockchain Explained

With more and more frequency we hear that concept: smart contracts . The simplest definition in this respect is that they are contracts that have the capacity to be fulfilled automatically once the parties have agreed to the terms. But surely you have in mind the classic signed paper, so how is it possible that a contract can enforce itself? Well, the truth is that smart contracts are a little different from paper contracts.

Both are agreements in which two or more involved agree to comply with a series of conditions, and its fundamental elements are the same: the voluntary consent of all the parties, the object of the contract (good or service), and a just cause, true and lawful. 

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Now, both differ in three factors : the mode of writing, its legal implication and the mode of compliance.
Paper contracts are written in natural language. That is, it is enough to write the conditions and terms in the language involved. If all parties agree, they sign to secure their promise, which leads to their legal involvement: a paper contract has costs. Depending on the jurisdiction where the parties are involved, or under which they want to carry out the contract, it is very likely that they have to meet certain requirements, such as recourse to a notary. On the other hand, its mode of compliance is subject to the interpretation of the parties, which may favor one more than the other.

The intelligent contracts , however, are software. They are not written in natural language, but in virtual code. They are a type of software that is programmed, like any other software, to carry out a task or series of tasks determined according to the instructions previously introduced. Its fulfillment, therefore, is not subject to the interpretation of any of the parties: if event A happens, then consequence B will be launched automatically. Its legal implication has fallen - like all the technology related to Bitcoin - in a gray zone. No trusted intermediary is required (such as a notary), since this role is adopted by the computer code, which will ensure without doubt the fulfillment of the conditions. Therefore, significant time and costs are reduced.