Zoran Djorović*

SMART CONTRACTS AND THE APPLICATION OF BLOCKCHAIN TECHNOLOGY

Summary

The paper analyzes the concept of smart contracts, their origin, and application through blockchain technology as a concept of decentralized security and encryption. Within the cryptocurrency paradigm, blockchain is predominantly perceived as an information system for financial transactions; however, its use extends far beyond that, with legal transactions being a notable domain. Automated execution through incorporation into software code as a permanent blockchain record contributes to the reliability and non-repudiation of contracts without the involvement of intermediaries. The legal framework within which smart contracts operate remains largely unregulated, raising issues of jurisdiction and legal certainty. The author examines the implementation of smart contracts through the Ethereum blockchain platform, which enables their execution. Due to their permanent and immutable nature, smart contracts can achieve a higher degree of trust, yet they are more rigid to modifications compared to written contracts, posing a particular challenge in terms of the adaptability of programming languages. The paper includes a comparison between "standard" smart contracts and Ricardian contracts, driven by the need for flexibility and clarity in aligning executable code with the conventional language of contracts.

Keywords: blockchain, smart contracts, Ricardian contracts, Ethereum.