Smart Contracts and Their Identity Crisis

Abstract

Many expect Smart Contracts (SC’s) to disrupt the way contracts are done implying that SC have the potential to affect all commercial relationships. SC’s are automatization tools; therefore, proponents claim that SC’s can reduce transaction costs through disintermediation and risk reduction. This is an over-simplification of the role of relationships, contract law, and risk. We believe there is a gap in the understanding of the capabilities of SC’s. With that in mind we seek to define an amorphous term and clarify the capabilities of SC’s, intending to facilitate future SC research. We’ve examined the legal, technical, and IS views from an academic and practitioner’s perspective. We conclude that SC’s have taken many forms, becoming a suitcase word for any sort of code stored on a blockchain, including the embodiment of contractual terms; and that the immutable nature of SC’s is a barrier to their adoption in uncertain and multi-contextual environments.