What is a smart contract?

A smart contract is a coding protocol intended to facilitate, and verify the negotiation or performance of a contract without a 3rd party or authority. It was first proposed by Nick Szabo in 1996 and it has now become increasingly popular because of the crypto currency Ethereum.

In practice, smart contracts are fully self-executing, self-enforcing, or both which is decentralized and distributed via a public ledger or a public registry of transactions. The intent behind smart contracts is to provide security and assurance to all parties, while efficiently passing the nuances of traditional contract law and reducing other transaction costs.