Introduction of the master's thesis presents the historical developments of the blockchain technology and its role in the emergence of cryptocurrencies. It describes how the technology works and emphasises the importance of oracles, which have to act in the name of a smart contract in the physical world. It continues by breaking down the term “smart contract” which is in essence established to be similar to computer programs and does not entail any special intelligence at this stage of development. To help with more widespread use of smart contracts, they have to fulfil certain requirements laid down by the applicable legislation. A special challenge comes in the form of reaching a consensus between the contracting parties, as the whole process of concluding the contract must be translated into computer code, which is not close to the natural, human language. Smart contracts also require us to give thought to interpretation of the rules of law using established interpretation methods and how to use those when the contract terms are written in computer code. The meaning of the term “document” as given to it by Slovenian law should be broadened to include smart contracts.
Given the technological features, the modifications of smart contracts are problematic and there are also issues arising with their termination. It is a good idea to stay wary of side-lining established authorities and intermediaries which support and ensure legal certainty of ordinary contracts, as the blockchain technology is also subject to threats arising from the cyber world.
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