Some think that smart contracts are legally enforceable. However, this is not yet the case. The legalities around smart contracts are still being worked out and there are many complex issues that need to be ironed out before they will actually become part of our daily lives. The necessary legal frameworks need to be put in place and these will have to also be accepted by different legal jurisdictions to ensure their validity. In the meantime, smart contracts are a good way to keep an audit trail to prove whether the terms of a legal agreement were followed or not.

Many also associate smart contracts with Artificial Intelligence, maybe due to the ‘smart’ label. The reality is that the type of software behind smart contracts is event-driven, whereby certain code is triggered only if an event occurs. In fact, smart contracts are not self-executing bits of code and they do not run unless someone initiates them.

The domains in which smart contracts can be used are also unlimited, since this is only restricted by the developers who encode the contracts in the first place. Smart contracts can be used in several ways, and are ideal for interacting with real-world assets, property, Internet of Things services and financial services instruments.

As an example, Walmart used this technology to be able to track exactly its whole supply chain, thus staff and customers alike are able to, in one click, track all the shipments and operations of any product. The information provided can then be used for further analysis.

For more myths about smart contracts: https://bit.ly/2jICp7n