Smart contracts

Smart contracts are one of the most exciting concepts in blockchain, representing self-executing scripts stored on the blockchain itself. The smart contract takes the blockchain concept to the next stage, enabling it to translate business logic into inviolable contract terms, which will be autonomously executed without relying on a broker, lawyer, or other intermediary.

The earliest form of a smart contract was defined in bitcoin using basic locking and unlocking scripts, but the concept evolved with the emergence of other blockchains.

Smart contracts are one of the more powerful, disruptive forces within blockchain, and are garnering more and more business attention, as described in the Gartner report Why Blockchain’s Smart Contracts Aren’t Ready for the Business World (see https://www.gartner.com/smarterwithgartner/why-blockchains-smart-contracts-arent-ready-for-the-business-world/). Gartner estimates that by 2022, smart contracts will be used by more than 25% of global organizations.

Owing to their importance, we will return later in this book to introduce you to smart contracts in leading blockchain platforms—bitcoin, Ethereum, and Hyperledger.

We have now finished describing the concepts—let's practice a little bit to understand what has been presented so far.