BY: Callie Capraro
MCDONOUGH LAW LLC
There’s an emerging buzz around the use of smart contracts, and it’s easy to see why. Opportunities to use smart contracts are virtually endless. They have already been used for the purchase of goods, in real estate exchanges and in retirement planning. As their use grows in popularity, it may be a matter of time before smart contracts become routine in estate planning.
WHAT IS A SMART CONTRACT?
To understand smart contracts, the key concepts of the blockchain must also be understood. Blockchain is a public ledger that uses computer code to store information. Each new block on the public ledger contains the information from the block before it, creating a link between the blocks. Any change to the information contained within one block creates a new link in the blockchain.
The fact that the blockchain is public might cause skepticism. While the transaction is publicly viewable, the information and identity of those involved are only identified by encrypted code. Only those who are involved in the transaction have a digital key to access their information. As a result, these public transactions are not only safe, but data entered to the blockchain by all parties to a smart contract is verified for accuracy and to prevent fraud.