Definition of Smart Contract

The new information technologies and communication (TIC, for its acronym) are designed both to more easily access information at all levels and to be able to increase our sources, as well as to automate tasks.

Automation allows us to put aside many repetitive tasks, to which from a certain At the moment we no longer have to pay attention, in favor of dedicating that saved time to tasks that require our creativity.

Among the tasks that we can save is the verification and completion of tasks that can be done through computer through Internet, corresponding to compliance of the clauses of a contract. This is what is called a “smart contract”.

A smart contract It consists of the implementation in the form of a computer program, of a contract between two or more parties. It is used for the execution of actions automatically in cases of compliance or non-compliance with the clauses.

Before delving into the explanation, and to clarify concepts, let's take an example: let's imagine that we must sign a contract between several people who foresees that, when each of them Deposit a certain amount in a checking account, a company will be formed and a share distribution will be made according to the amounts entered by each of the people participants.

This, without the aid of a system that allows the use of smart contracts may require a visit to the lawyer or notary to sign an agreement, followed by visits to the respective banks, and one or more visits to the lawyer or notary with proof that the deposit has been made with the amount appropriate.

Finally, another visit may be necessary to sign the definitive contract once completed. the previous procedures, with the corresponding distribution of shares already correctly carried out.

But what if we have a smart contract? Well, once the corresponding income, the computer systems of banks could notify in an automated way (for example by e-mail, an SMS message or a request HTTP) to the system that hosts the contract, which, once all the income has been made, would carry out the distribution of the shares, and could even establish the company in an automated way if the procedure was foreseen by the public administration.

All this, as we can see, saving all participants a good number of visits to the lawyer or notary, and speeding up the execution of the procedures.

Smart contracts use, at their base, blockchain technology, which has been proven highly secure, to the point that its security has never been violated.

It is not the only technology that allows the creation of smart contracts, but it is the most obvious and that we have at our disposal today.

The smart contracts They are not an entelechy that must be implemented and used yet, a promise for the future, but rather they are a tangible reality that is already being used, albeit on a few occasions.

This is due to the novelty of the technology and its use, to the ignorance of said possibility by the end public, to the ignorance of the technology on the part of the legal world, and a certain aversion on the part of those who understand the laws to change their habits (not in all cases, but in Many).

Finally, administrations, including justice, operate at a slower pace than society, so it will still take time to recognize, accept and support this use of technology.

As an example of its use, I can explain the case of a company registered in the record company in Madrid (Spain) in June 2018 that used a smart contract to be constituted after the parties presented an income in the form of cryptocurrency.

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