<commit_before>---
layout: post
title:  "What is a Smart Contract"
---

I'm spending quite a lot of time experimenting with [Smart Contracts](https://en.wikipedia.org/wiki/Smart_contract) on the [Ethereum](https://www.ethereum.org/) platform. I am using the term "Smart Contracts" below in the sense that they exist on Ethereum, and have tried to capture what makes them special for me:

Features
========
1. Smart contracts are executable business logic and data, written in a computer language
2. Smart contracts can run on a public block-chain / distributed ledger that is de-centralised
3. The block chain is secure.
 
Taking each of these in turn:


Contracts are executable business logic and data, written in a computer language
--------------------------------------------------------------------------------
1. they are not ambiguous
   * they do not need a judicial system or lawyers to interpret them
2. they can be unit-tested
3. they execute quickly in seconds, automating back-office operations that are often manual today
4. they are binding
   * participants send irrevocable transactions and value into them
5. BUT the State may still consider them to be illegal, or at least entered into illegally
   * will we need a State-sponsored block-chain that allows the State to retain control?
   * or will a legal precedent be set that if the contract is executed and participated in an environment where the state has no control, that the State cannot intervene?


Contracts can run on a public block-chain / distributed ledger that is decentralised
--------------------------------------------------------------------------------
1. Contracts running on it are beyond the reach of manipulation<commit_msg>updated with contract basics<commit_after>---
layout: post
title:  "What is a Smart Contract"
---

I'm spending quite a lot of time experimenting with [Smart Contracts](https://en.wikipedia.org/wiki/Smart_contract) on the [Ethereum](https://www.ethereum.org/) platform. I am using the term "Smart Contracts" below in the sense that they exist on Ethereum, and have tried to capture what makes them special for me:

Features
========
1. Smart contracts are executable business logic and data, written in a computer language
2. Smart contracts can run on a public block-chain / distributed ledger that is de-centralised
3. The block chain is secure.
 
Taking each of these in turn:


Contracts are executable business logic and data, written in a computer language
--------------------------------------------------------------------------------
1. they are not ambiguous
   * they do not need a judicial system or lawyers to interpret them

2. they can be unit-tested

3. they execute quickly in seconds, automating back-office operations that are often manual today

4. they are binding
   * participants send irrevocable transactions and value into them
   
5. BUT the State may still consider them to be illegal, or at least entered into illegally
   * will we need a State-sponsored block-chain that allows the State to retain control?
   * or will a legal precedent be set that if the contract is executed and participated in an environment where the state has no control, that the State cannot intervene?


Contracts can run on a public block-chain / distributed ledger that is decentralised
--------------------------------------------------------------------------------
1. Contracts running on it are beyond the reach of manipulation
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