Here we are in the year 2025, and we’re still waiting for the future they promised us back in the 1950s. Where are the robot butlers and house cleaners? All that drudgery was supposed to be automated by now; the closest thing they’ve given us so far is the Roomba. C’mon, people.
At least we’ve got the blockchain. As it turns out, there are other things besides laundry that you can automate to a large degree – contracts, for example. We’ve touched on so-called “smart” contracts in this space while talking about NFTs, but there’s a lot more to these bad boys than crudely drawn apes in beanie propeller hats. Smart contracts are actually the driving force behind the entire crypto market. And they’re not going to stop there.
What Are Smart Contracts?
You may already be familiar with smart contracts if you’ve dabbled in NFTs, or done any decentralized finance (DeFi) with Ethereum. These contracts live on the blockchain, and they’re called “smart” because they execute themselves, automatically carrying out the instructions encoded therein.
Smart contracts aren’t just limited to Ethereum, though. Any computer program using a blockchain can be considered a smart contract; the entire Bitcoin protocol (including the blockchain, the peer-to-peer network, the public ledger, the cryptographic security measures and so on) qualifies, although Ethereum co-founder Vitalik Buterin upped the ante by coding with the Solidity programming language, which was designed specifically for developing and implementing smart contracts.
Now we’ve got entire blockchains like Solana and Cardano created just for running smart contracts – and the decentralized apps that use said contracts. Some of these were launched by non-profits; others are backed by venture capital, or otherwise funded by private interests.
Always make sure you know who’s who and what their business models are before getting involved.
Are Smart Contracts Legally Binding?
Not in and of themselves.
This is where the jargon gets a little tricky; the “contract”, in this case, is not a legal agreement, just a series of operations that completes a transaction – like sending an NFT from one party to another.
There are still rules to be followed, though. Like everything else you can do in this world, smart contracts are subject to certain regulations, although we are living in the Wild West when it comes to DLT (Distributed Ledger Technology) law. Individual states like Nevada and Arizona have passed their own smart contract legislation bundles; otherwise, there’s a general – but hardly 100% – consensus that existing state laws have things sufficiently covered.
What Are Smart Contracts Good For?
Just about anything you need verified. NFTs have value because they’re exactly that: Non-Fungible Tokens. The smart contract you use to transfer an NFT is also a unique identifier that can’t be copied or manipulated in any way, at least none that we know of.
Which is why everyone’s talking about DeFi these days. Financial assets are on everyone’s shopping list, although you can buy, sell, lend and borrow just about anything on the blockchain – as long as it’s digital. DeFi platforms let you be the banker and collect interest or maybe get that car loan the bank wouldn’t give you.
Even if you don’t have more than a… token interest in crypto (puts on shades), smart contracts are being used right now all around you to manage supply chain operations for non-crypto goods. The payments and ledger entries are automated, and in cases where human intervention may be needed – say you’re shipping ice cream, and the temperature inside your delivery truck has to stay within a certain monitored range – contracts can “flag” certain events that require action.
Even without the deregulation crusade that Elon Musk and his DOGE team have mounted in the U.S., we were always going to see smart contracts take an increasingly larger role, both within the cryptocurrency space and beyond. Like crypto itself vis-a-vis “fiat” currency, smart contracts are simply a better way of doing business. But there’s no question that our Wild West is about to get even wilder.
Keep following Bookmakers Review to stay on top of the latest crypto news as it happens.
