A smart contract is a computer protocol that facilitates, verifies, or enforces the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible. Smart contracts were first proposed by Nick Szabo in 1996. The use of smart contracts has been proposed for a wide variety of purposes, including insurance, employment, and dispute resolution. The potential applications of smart contracts have been explored by a number of industries and organizations. The use of smart contracts on a blockchain is attractive because it can potentially automate many manual processes and reduce the costs and risks associated with traditional contracts. For example, a smart contract could be used to automatically release funds to a contractor when a project is completed. There are a few challenges that need to be addressed before smart contracts can be widely used on a blockchain. First, the scalability of blockchain systems needs to be improved. Second, the development of standards for coding smart contracts is needed to ensure their interoperability. Finally, there needs to be a way to verify the accuracy of smart contracts. Despite the challenges, the use of smart contracts on a blockchain has the potential to revolutionize the way that contracts are negotiated and executed.
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