Smart Contracts are Nick Szabo's idea
What are Smart Contracts?
Here is a slightly idealized explanation of AMIX (The American Information Exchange)--the first smart contracting system.
Our paper, Capability-based Financial Instruments, explains how Smart Contracts can be written in E. In contains two main examples:
Donut-Lab, a PlanetLab with no center, built from Smart Contracts
ERTP has been superceded by the Waterken IOU Protocol. This section remains for historical interest.
Capabilities are electronic rights of a sort, but by themselves lack 2 crucial features needed for tradable electronic rights:
The next layer above distributed capabilities, ERTP, does provide these properties. The ERTP protocol accommodates fungible & non-fungible rights, exclusive & non-exclusive rights, and blinded or non-blinded transfer. Only electronic rights manipulable via ERTP are called erights.
ERTP is a simple protocol involving only 4 types and 9 methods. Money in ERTP shows money re-implemented as a proper eright. Money is exclusive, fungible, and non-exercisable. Money transfers should be blinded, but this implementation provides only non-blinded transfer.
By contrast, exclusive.updoc implements, as an exclusively transferable eright, the ability to invoke (pass messages to) particular underlying objects that an Issuer decides to make accessible in this manner. These erights are exclusive, non-fungible, and exersizable. As Nick explains in Contracts with Bearer, since these erights are non-fungible, nothing would be gained by blinding their transfer.
ERTP has been independently implemented as part of the Waterken Sea package, which also defines many particular erights. The Waterken version of ERTP seems better on many dimensions than the one explained here, and we expect to be adopting it (or a close variant of it) as our new definition of ERTP.
Unless stated otherwise, all text on this page which is either unattributed or by Mark S. Miller is hereby placed in the public domain.