44. Smart contract

Blockchain applications greatly depend on smart contracts, which are programs of software code that automatically execute the terms of upfront negotiated agreements. The execution of such agreements has traditionally been guaranteed by a single trusted entity, but is increasingly guaranteed by distributed blockchain systems. In this chapter, we examine the process of using smart contracts and elaborate on how traditional and blockchain-based smart contracting differ with respect to their underlying governance structure, potential economic impact, and general characteristics of suitable areas of application.