What is a smart contract? | Diego González

We’ve already talked about the importance of digital transformation for companies in 2019. One of the key points of this transformation is blockchain technology, which you might have heard about more than once (for instance, in our blog).

One of the basic concepts of this technology are smart contracts. For this reason, our Blockchain Expert, Diego González, tells us in this video what exactly they are and what their function is.

When we talk about smart contracts, we generally mean programs that guarantee the fulfillment of an agreement between two or more parties. Initially, the concept was used to designate formal descriptions, lacking semantic ambiguity, which could act as a guarantor of an agreement without the need of a third party.

This fact is profoundly interesting, since writing the contract in code instead of using a natural language, and if we have a system able to “compute”, interpret or “execute” this code, it would eliminate the need for an organism to ” apply the law “or” force compliance with it “eliminating the need for an external organism. The code becomes the law. The code becomes, in some way, a sort of self-validated agreement.

The term smart contract has been generalized and is commonly used to describe all kinds of programs whose logic can be implemented in a system with blockchain technology.

So, in other words, we usually call smart contracts to small programs with different tasks but that have in common the fact that they “live in the blockchain” and whose correct execution is guaranteed by the nature of this type of technology.

If you want more information about the use of blockchain technology in document and invoice certification, do not hesitate to contact us. We will be delighted to help you!

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