A smart contract is a digital agreement and protocol to enforce the execution and performance of the contract terms. The terms of this digital agreement are pre-programmed into the smart contract and enforceable using data on, or accessed by, the blockchain. A smart contract enables two or more parties to safely trade and do business over the internet without the need of a trusted third-party to verify or uphold the terms of the agreement.
The origin of the smart contract dates back to the 1990s. The term, “smart contract”, was first coined in 1993 by Nick Szabo, and referred to self-automated computer programs that can carry out the terms of any contract.