A smart contract can be described as a computer protocol that has the aim of digitally facilitating, verifying or enforcing the negotiation or performance of a contract. Through smart contracts, an individual is able to perform credible transactions without going through any third parties. These transactions are however trackable given the nature of smart contracts. Nevertheless, they are irreversible in nature like any other blockchain transaction. Nick Szabo first proposed smart contracts and coined the term, back in 1994.
It should be noted that smart contracts can enter either be partially or fully self-executing. It can even be self-enforcing contractual clauses that contributes to the ability of smart contracts to not be reversible. Given these features of smart contracts, it should be noted that smart contracts are not reversible. in other words, once a smart contract is executed, it is not possible to undo the execution.
They aim to provide superior security and enforce-ability compared to the traditional contract law and at the same time reduce other transaction costs associated with contracting. It has since become a vital part of Ethereum’s blockchain by using a modified version of Nakamoto’s original consensus via transaction-based state transitions.