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Preparing ahead for smart contracts
In this paperless era, the smart contract has been given the green light for legal admission.
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In this paperless era, the smart contract has been given the green light for legal admission. (Shutterstock/File)
W
ith the advancement of technology, we are facing rapid innovations-and digital breakthroughs. This progress has caused many sectors to change the way their businesses operate, especially the legal industry, which relies on paper to execute contracts. In this paperless era, the smart contract has been given the green light for legal admission.
In September 2016, approximately 123,376 smart contracts were uploaded to public blockchain platforms.
Today, more than a million smart contracts are being created and used around the world. The use of smart contracts is growing exponentially at a fast pace, and it is just a matter of time before the trend reaches Indonesia — likely sooner than we expect.
To put it simply, a smart contract is similar to a traditional contract. It is a list of rights and obligations through which one or more individuals bind themselves to one another, turning it into a binding agreement.
The difference is that a smart contract is purely digital and drafted by formulating lines of code with the support of a blockchain computing platform. The most common platform used to create smart contracts is called Ethereum.
The unique characteristics of the smart contract lie in its ability to self-execute and self-enforce, executing all provisions automatically and precisely as set up by their creators.
Smart contracts can also be considered electronic transactions under the Indonesian Electronic Information and Transaction Law, since they are legal actions that are executed through the use of a computer, a computer network, or other electronic media.
