What is an Ethereum Smart Contract?
Smart contracts is a new technology made possible by Ethereum on its public blockchain.
A standard contract usually outlines the terms of a relationship which is enforceable by law.
However, a smart contract enforces the terms with a cryptographic code and cuts out the middleman.
The idea was first conceived in 1992 by computer scientist Nick Szabo. He described how users could input data and receive a finite item from a machine such as a soft drink or snack.
So, for example, if an ethereum user wants to send 10 ether to a friend on a certain date using a smart contract. The user can create a contract, push the data to the contract and use it to execute the desired command.
Smart contracts can:
- Manage agreements between users
- Store information about applications
- Function as multi-signature accounts
- Provide utility contracts such as water and electricity.