Smart contracts are agreements in which two or more parties agree to comply with a series of conditions, and their fundamental elements are the same: the voluntary consent of all parties, the object of the contract (good or service) ), and a just cause, true and lawful. Smart Contracts are possible thanks to the Blockchain technology, which also made possible the creation of Bitcoin digital currency since 2009, in 1997 the jurist and cryptographer Nick Szabo, for the first time in the world, defines in detail the concept of smart contracts
In this way, these intelligent contracts have the capacity to modulate transactions according to the levels of trust of the parties involved. Being written in an encoded language cause that none of the parties that are involved in the agreement are able to know the internal operation of the same, an intelligent contract is designed under a concept of conditions that will bring agility to the business sector. These contracts work in the chain of blocks and, a priori, they do not need the intervention of the people to verify and execute their compliance.
Also, they are "scripts" (computer codes) written with programming languages, the terms of the contract being sentences and commands in the code that forms it. Therefore, an intelligent contract is capable of being executed and enforced by itself, autonomously and automatically, without intermediaries or mediators.
They avoid the burden of interpretation by not being verbal or written in the languages that are normally spoken. Thus the contracts can be converted to computer code, stored, replicated and supervised by the network of computers on which the Blockchain runs. This would also result in a system of transferring money and receiving products or services.
In the same sense, by substituting human management for the intelligence of a system; which also has the ability to account for, determine, secure automatically and securely the conditions of a contract at a lower cost, it is possible to determine that artificial intelligence has become a better option. The result is a virtual armored agreement with all eventualities covered, so that if all the parties deliver what was agreed, there will be no possibility of fraud.
Therefore, the purpose in the design of smart contracts is to allow people to trade and do business with strangers, usually through the Internet, without the need for a centralized authority site to act as an intermediary.
Among the most recognized intelligent contract platforms is Rootstock, one of the most used systems by Bitcoin investors. IBM vice-president of Blockchain technology, Jerry Cuomo, believes that smart contracts can be used in many sectors, from financial services to medical care and insurance.
In the same way, it is possible to make intelligent contracts with Bitcoins, however, it is necessary for a software to execute the management of the agreements, since this cryptocurrency does not have that system. In 2014, two open source platforms for the implementation of smart contracts emerged:
Codius: developed by Ripple Labs, a company that has also created its own digital currency called Ripple, is designed to work with various cryptocurrencies.
Ethereum: initially developed by a young programmer, Vitalik Buterin, when he was just 20 years old, he works with a completely new payment system and currency. The currency is called "ether" and its development was financed by crowdfunding.
In this order of ideas, intelligent contracts are envisioned in the businesses of the future and in the present are already anchored in:
Purchase of property: The amount of money that must be paid monthly will be established, as well as the number of months and the condition of non-payment. In addition, the title of the property will also be added to the contract. Once the contract is created, there will be no intermediaries or ways to modify it.
Elections: Any type of election (such as a survey) can be registered in smart contracts, so that the winning option would trigger a specific consequence. In addition, the votes would enter the chain of blocks and would be impossible to modify or alter.
Bets: By not having to rely on trust, now the bets will be much more secure between two or more individuals. However, a change house could open smart contracts for each game.