Transaction Costs of Blockchain Smart Contracts
Law and Forensic Science, Volume 16 (2018/2)
6 Pages Posted: 24 Oct 2018
Date Written: July 11, 2018
Smart contracts are computer programs executed on virtual machines, which are used to regulate relationships between the subjects of law. They allow parties to foresee, with a high degree of certainty, how will the contractual relationship develop and by the use of blockchain technology they provide a high degree of certainty. It has been conjured that smart contracts will offer significantly lower transaction costs in relation to traditional contracts. The paper analyzes this proposition and finds that not only are the gains doubtful, but also that in some cases transaction costs may be significantly higher.
Keywords: Smart Contract, Transaction Costs, Blockchain
JEL Classification: K12
Suggested Citation: Suggested Citation