Smart Contracts are essentially contractual clauses that execute and enforce themselves through use of code (programming code not legal code).



In Ethereum a contract is a piece of code that lives on the blockchain. The contract is created as part of a transaction and run by every single node on the blockchain.



The rights and right holders are stored as data and code on the blockchain itself.



Rights holders can access their rights by calling functions that are predefined as part of the Smart Contract.



Each function call is in itself a Ethereum transaction and the code within is also executed by every single node on the Ethereum network.



A Smart Contract as defined in Ethereum is not necessarily a contract in the strict legal sense of the world, although it may be.



In this article I won’t get into the underlying architecture of the Ethereum blockchain, but mainly focus on Smart Contracts