Smart contracts were first described by Nick Szabo, a computer scientist and cryptographer, in 1996. Over the course of several years, Szabo reworked the concept and released several publications, where he described the concept of establishing contract law related business practices through the design of electronic commerce protocols between strangers on the Internet.

However, the implementation of smart contracts did not happen until 2009, when the first cryptocurrency Bitcoin appeared along with its Blockchain, which finally provided a suitable environment for smart contracts. Interestingly enough, Nick Szabo designed a mechanism for a decentralized digital currency called Bit Gold in 1998. It was never implemented, but it already had many of the features that Bitcoin boasted about 10 years later.

These days, smart contracts are mainly associated with cryptocurrencies. Moreover, it is fair to say that one could not exist without the other, and vice versa, as decentralized cryptocurrency protocols are essentially smart contracts with decentralized security and encryption. They are widely used in most of the currently existing cryptocurrency networks and are the prominent and one of the most hyped features of Ethereum.

_{Cointelegraph. 2020. What Are Smart Contracts? Guide For Beginners. [online] Available at: <https://cointelegraph.com/ethereum-for-beginners/what-are-smart-contracts-guide-for-beginners> [Accessed 26 November 2020].}