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Smart contracts are applications that execute on decentralized infrastructure, such as a blockchain. They are tamperproof, in the sense that no party (even their creator) can alter their code or interfere with their execution. Historically, contracts embodied in code have run in a centralized manner that leaves them subject to alteration, termination, and even deletion by a privileged party. In contrast, smart contracts’ execution guarantees, which bind all parties to an agreement as written, create a new and powerful type of trust relationship that does not rely on trust in any one party. Because they are self-verifying and self-executing (i.e., tamperproof as explained above), smart contracts thus offer a superior vehicle for realizing and administering digital agreements.
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