For some years, the term smart contracts has become popular, over all closely linked to the technological field, which is where it comes from, but now it is already present in other areas due to its great potential.
The first references I had of smart contracts were in relation to blockchain technology, which is what supports the cryptocurrency structure such as Bitcoin. Nowadays, this virtual currency has a bad reputation for the speculation that it is subject to, as well as for its supposedly unethical use. I think that both accusations are debatable or, at least, not exclusive; in the end, everything that is in an open market can suffer the effects of supply and demand; and I doubt there is a physical currency which hasn’t been used to buy drugs, weapons, influences … but this is the subject of another debate.
Without going into technicalities that I do not know, one could say that smart contracts are self-executing computer programs when the conditions established in those contracts are met, and based on the aforementioned blockchain technology that would provide robustness, transparency and reliability. Maybe this doesn’t seem particularly relevant, but my impression is that its generalization would mean the simplification of agreements between parties, providing them with greater security.
However, and this is my complaint, I believe that we are not in the moment or in the environment so that we can fully benefit from this technology. Among other things, because of the following reasons:
– Greater definition and clarity of the contract: many contracts are drafted in a vague manner, especially in relation to the effects of non-compliance or breach of its articles. And that is an especially powerful element of smart contracts, which are automatically executed when there is a causality (if, them) in that contract.
Perhaps some prefer those vague texts that, in case of discrepancy, allow tricks to litigate. That is contrary to the philosophy of smart contracts.
– A new language is needed: writing these contracts will be more similar to programming than writing a document. Therefore, people who have the knowledge to program the content of the contract will be necessary.
– Lack of legal development: to expand this technological innovation it will be required minimum legal conditions that the parties assume and allow them to get involved. This may require the establishment of standards at the transnational level, which may take time.
In the absence of these conditions, I believe that only some highly interrelated sectors, such as finance, will be able to launch initiatives based on smart contracts.