Publication | Open Access
Formalizing and Securing Relationships on Public Networks
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1997
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EngineeringInformation SecuritySecure ProtocolsLawSmart ContractsCommunicationPublic NetworksFormal VerificationSmart Contract LanguageFintechSocial Network SecurityPrivacy-preserving CommunicationSecure ProtocolSocial Network AnalysisNetwork SecurityData PrivacyComputer ScienceSmart ContractData SecurityCryptographyNetwork ScienceBusinessBlockchainBlockchain Protocol
Smart contracts formalize and secure relationships over computer networks by combining protocols with user interfaces, drawing on legal, economic, and secure‑protocol theories and contrasting them with traditional written contracts. The article examines protocols applicable to key contracting domains such as credit, content rights management, payment systems, and bearer contracts. By employing cryptographic and other security mechanisms, these protocols protect algorithmically defined relationships from breach, eavesdropping, and malicious interference, while addressing timing, user interface, and specification completeness.
Smart contracts combine protocols with user interfaces to formalize and secure relationships over computer networks. Objectives and principles for the design of these systems are derived from legal principles, economic theory, and theories of reliable and secure protocols. Similarities and differences between smart contracts and traditional business procedures based on written contracts, controls, and static forms are discussed. By using cryptographic and other security mechanisms, we can secure many algorithmically specifiable relationships from breach by principals, and from eavesdropping or malicious interference by third parties, up to considerations of time, user interface, and completeness of the algorithmic specification. This article discusses protocols with application in important contracting areas, including credit, content rights management, payment systems, and contracts with bearer.