Detailed introduction: When was smart contract first proposed?

A smart contract is a set of commitments specified in digital form, including an agreement for each party to fulfill those commitments. In addition to blockchain technology, smart contracts have also attracted strong interest from enterprises. Despite its early development, they exist mostly theoretically. Smart contracts help resolve issues of mistrust between parties and business partners. Smart contracts have many benefits for various industries and can reduce unnecessary cost and time expenditure while increasing transparency. Smart contracts are stored on the blockchain and the system is difficult to breach as it requires huge computing power to cover the entire network. Many investors want to know when was the smart contract first proposed? Let me introduce it to you below.

When was smart contract first proposed?

Smart contracts were first proposed in 1994. Digital contracts have been around for decades. Insurance premiums are automatically deducted from bank accounts. Amazon’s order book is a common example. However, these are considered "weak" contracts, meaning they can be revoked or modified at a later date. The main benefit of using "strong" smart contracts is that they are self-executing and objective. Contracts are represented by a sequence of computational instructions and code that are, they say, mathematically, logically and semantically precise and are said to require no further explanation by slow, cumbersome legal mechanisms.

Some people suggest integrating smart contracts with the traditional court system. This is actually the exact opposite of the idea of ​​blockchain. Blockchain networks consume significant amounts of resources simply to ensure their immutability, irreversibility, and guaranteed execution. Allowing courts to strike down smart contracts would violate these fundamental principles. There is little difference between traditional digital contracts and blockchain smart contracts, except that the latter require more resources to maintain.

Applications of Smart Contracts

A much-touted use case for smart contracts is in the insurance sector, where they are said to guarantee timely payment and processing of claims. Insurance companies spend a lot of money investigating and evaluating claims. Claim evaluation requires physical inspection, careful reading of documents, and interviews, and is a complex, time-consuming process that involves a lot of subjectivity. It is ridiculous to claim that a few lines of code can reliably replace all of these without significantly increasing the cost of premiums for all other customers.

Middlemen are caricatured by blockchain proponents as greedy, dollar-eyed capitalists who trample on the poor. In doing so, they completely ignore the services and benefits they provide - credit card companies also provide fraud protection; stock exchanges and brokers provide liquidity and leverage; lawyers ensure that contract terms do not unfairly prejudice the rights of any party ;The bank provides on-demand loans, foreign exchange, investment, etc. Modern business mechanisms rely on these important intermediaries to function effectively.

Despite all the waxing and waning of philosophies about trust and security, smart contracts’ reliance on oracles reveals the continued need for neutral, trusted third parties in most everyday transactions. Distrust, one of the main claims of blockchain, becomes very weak when key elements of smart contracts rely on trust. The pressure for convenience and usability will inevitably lead to the centralization of oracles. This process will ultimately lead to the proliferation of single centralized providers offering oracles, contracts, and other services—a situation not unlike today.

The above content is the editor’s detailed elaboration on the issue of when smart contracts were first raised. Smart contracts are computer programs or protocols for automated transactions that are stored on the blockchain and run in response to certain conditions being met. In other words, smart contracts automatically execute agreements so that all participants can determine the outcome as quickly as possible without the involvement of intermediaries or time delays. Smart contracts are self-executing contracts in which the content of the agreement between the buyer and seller is written directly into the lines of code, using which the transactions can be made traceable, transparent and irreversible. Since smart contracts are digital and automated, there is no paperwork to deal with, and no time is spent correcting errors that can occur when filling out documents manually.

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