A smart contract is a form of protocol that allows the facilitation of a contract including the verification, enforcement, negotiation and performance.
Smart contracts aim to provide a superior experience and process to that of a traditional contract of law and also reduce the associated cost of the paperwork etc. While traditional contracts of law can be quite time consuming to create due to the amount of paperwork required, smart contracts seek to automate many of the processes involved in contract creation to greatly speed up the whole process. Although a smart contract increases the processing time of creating a contract, there have been known security issues that have been exploited such as an attack on The DAO which resulted in the loss of 50 million worth of digital currency.
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