Law Meets Algorithm: The Rise of Smart Contracts

As the world grows more digital, the notion that "code is law" has become more popular, and especially with blockchain technology and smart contracts gaining prominence.

- Ritika Goswami

These are self-executing contracts coded to enforce terms upon the meeting of pre-defined conditions. No middlemen, no red tape—merely code and faith in the system. But the real question is: Can code ever supplant law, or does it rely on law to exist?

WHAT ARE SMART CONTRACTS?

A smart contract is a piece of software running on a blockchain that executes automatically when some specified conditions are met. It's an "if-then" situation: If Party A transfers X, then Party B will pay Y. From property transactions to insurance payouts and decentralized finance (DeFi), smart contracts hold out the promise of transparency, speed, and lower costs. But here is the paradox: What if the code breaks, or the parties disagree about its result?

THE LEGAL GREY AREA