As lawyers we ought to be worried.Â Vitalik Buterin, the 22-year-old programmer of EthereumÂ ( which in it itself is going to be massive) explained it thus “In a smart contract approach, an asset or currency is transferred into a program and the program runs this code and at some point it automatically validates a condition and it automatically determines whether the asset should go to one person or back to the other person, or whether it should be immediately refunded to the person who sent it or some combination thereof.Â
Makes sense? No? Well here is an example.Â
I want to rent my apartment to you. You pay using bitcoin and get a receipt which is held in the virtual contract. I undertake to give you the digital entry key which comes to you by a specified date. If I dont the blockchain will send you a refund. Its known as the “If-Then” premise and is witnessed by hundreds of people via a ledger. Or think of it as a vending machine. The code dictates when the x will be released.
All you do is pay via bitcoin and encode your contract on the ledger. Its transparent and uber safe and its the future.Â
An excellent and useful place to read up on these smart contracts is Cornell.Â