Some scholars have argued that the imperative or declarative nature of programming languages would impact the legal validity of smart contracts.
The US National Institute of Standards and Technology describes a "smart contract" as a "collection of code and data (sometimes referred to as functions and state) that is deployed using cryptographically signed transactions on the blockchain network".
A smart contract also can be regarded as a secured stored procedure, as its execution and codified effects (like the transfer of tokens between parties) cannot be manipulated without modifying the blockchain itself.
Usually, the judicial system adjudicates contractual disputes and enforces terms, but it is also common to have another arbitration method, especially for international transactions.
"[21] States in the US which have passed legislation on the use of smart contracts include Arizona,[22] Iowa,[23] Nevada,[24] Tennessee,[25] and Wyoming.
[33][34] Some of the other smart contract programming languages missing Turing-completeness are Simplicity, Scilla, Ivy and Bitcoin Script.
[34] However, measurements in 2020 using regular expressions showed that only 35.3% of 53,757 Ethereum smart contracts at that time included recursions and loops — constructs connected to the halting problem.
Randomness on blockchain can be implemented by using block hashes or timestamps, oracles, commitment schemes, special smart contracts like RANDAO[40][41] and Quanta, as well as sequences from mixed strategy Nash equilibria.
As of 2015[update], UBS was experimenting with "smart bonds" that use the bitcoin blockchain[49] in which payment streams could hypothetically be fully automated, creating a self-paying instrument.
[50] Inheritance wishes could hypothetically be implemented automatically upon registration of a death certificate by means of smart contracts.
[53][54] Chris Snook of Inc.com suggests smart contracts could also be used to handle real estate transactions and could be used in the field of title records and in the public register.
The data provides cryptographic view of the transactions, however, this leads to a situation where bugs, including security holes, are visible to all yet may not be quickly fixed.
[62] Such an attack, difficult to fix quickly, was successfully executed on The DAO in June 2016, draining approximately US$50 million worth of Ether at the time, while developers attempted to come to a solution that would gain consensus.