Bit2Me Academy reports:

This text is intended to be a translation as faithful as possible to the original post entitled 'Glossary of Smart Contracts'. A document where Nick Szabo, father of the idea of Smart Contracts, aims to make a synthesis of all the elements and parts that make up a smart contract. With this glossary of smart contracts, Nick Szabo sought to make clear the important pieces of what would be one of the greatest creations within the tecnología blockchain.

This glossary dates from 1995, his idea of ​​smart contracts begins to be implemented in Bitcoin. Subsequently it has become a very important term within the world of cryptocurrencies. Is 'simple lines of code that execute themselves' have achieved great relevance, especially with the appearance of lto Ethereum network, which uses these functions to create decentralized exchanges, tokens and a large number of elements.

Nick Szabo Original Glossary


A person or organization, usually represented by a real name or surname. Also a program controlled by a computer and acting on behalf of an agent. More generally, a combination of a 'nym' with a persistent behavior pattern. On which a reputation can be built. Note that this differs from the legal and commercial definitions of 'agent'. However, it corresponds more closely to the economic and computer uses of the term.


A set of agreements or promises between agents.

Parties (also known as Directors)

Agents who have accepted the contract in question.


Agents who have not accepted the contract in question.


Fulfill the promises specified in a contract.

Contract security

A paradigm for making security arrangements between organizations, based on two claims:

1. The primary goal of inter-organization security is to protect and enforce compliance with contracts.
2. When this goal is achieved, the dependency on reputation, external enforcement, and other factors for the secure performance of that organization's contracts is minimized.

Contract key distribution

A paradigm for the distribution of keys between individuals and organizations. One in which the distribution and structure of certificates reflects the contractual agreements between the parties.


A sequence of messages between multiple agents.

Smart contract

A set of promises, including protocols within which the parties fulfill the other promises. The protocols are typically implemented with programs on a computer network or in other forms of digital electronics. So these contracts are 'smarter' than their paper ancestors. The use of artificial intelligence is not implicit.

Alice and Bob

In our example they are the names of the parts of a smart contract.


He is our spy, whose objective is to find valuable information about a contract and its execution without being part of it.


In our example the attacker. Your goal may be to steal something of value involved in fulfilling the smart contract or deny it to the parties to the contract. You can be an economically rational agent looking for a purely personal benefit. Or a Byzantine, or in the worst case, an attacker who causes as much damage as possible to one of the parties, regardless of personal loss.


A third party involved in real time in the protocols between the parties to a smart contract. One who is entrusted with part of the content and / or the execution of said contract.


A third party who is entrusted with part of the content and part of the history of the fulfillment of a contract. One in which contracting parties rely to resolve disputes arising out of that contract fairly.


The principle of distribution of trust. The separation of the mediation and arbitration functions divides the tasks. It seeks to spread risk, minimize vulnerability, and reduce binding capacity, but often at the cost of increased complexity.

Enemy (also known as an attacker)

An agent whose preferences could cause harm to another agent. A third party that influences the performance of a contract to the detriment of one or both parties.


Here it is used to refer generically to any type of digital data. Data that can be a key, a credential, a contract, a program, or a wide variety of other things.


A claim made by one agent about another. At this point we can meet Positive credential and negative credential. The first is a claim made on an agent, which the agent would prefer not to disclose, such as a title from a prestigious school. The second is a claim made on people, which the agent would prefer to disclose, such as a bad credit rating.

Cryptographic protocol

A protocol that uses key and mathematical principles to achieve smart contract goals.

Privity (private compliance link)

It is the principle that only the parties to a contract, including its appointed arbitrators, should know or control the content and performance of that contract. Privacy as an objective of a smart contract is a generalization of the legal principle of 'privity'. This principle formalizes the tradition that it is 'none of your business'.

The attacks on privacy are exemplified by Eve, the observer or 'spy'. As well as a passive observer of the content or performance, and the malicious vandal 'Mallet' who actively interferes with the performance or steals value. Privacy and confidentiality or protection of the value of information about a contract, its parts and their performance by Eve, is included within privacy. The application of the Privity concept often conflicts with observability and verifiability.

Translation note: The 'Principle of Privity' is a concept that in law refers to the null application of duties and rights to people who are not part of a contract. Therefore, the terms of a contract and their liability obligation apply to the parties involved and only they should know them.


The ability of the parties to a contract to observe the performance of that contract by the other party or to demonstrate its compliance to the other party. Also the ability to differentiate between intentional breaches of the contract and errors in good faith. It is an important goal of a smart contract design that often conflicts with privacy.


The ability of a party to prove to a arbitrator that a contract has been executed or breached and to differentiate between intentional violation and errors in good faith. It is an important goal of smart contract design that often conflicts with privacy.

Respectable name

A 'nym' or real name that has a good reputation, generally because it carries many positive credentials. He also has a good credit rating or is in some way highly respected. Companies strive to carry reputable brands, while professionals like doctors and lawyers strive to have many good personal recommendations for their name. Reputation can be difficult to transfer between agents, because reputation supposes the persistence of behavior, but such transfer can sometimes occur (for example, the sale of brands between companies)

Real name

An identifier that links many different types of information about an agent, such as a full birth name or a social security number. As in magic, knowing a true name can confer tremendous power on enemies. It can also have significant economic value among those who cooperate peacefully, such as in the use of direct marketing. To direct product information to agents who are most likely to be interested in those particular products.


A cryptographic messaging protocol in which Eve's analysis of who talks to whom (traffic analysis) is prevented by the sender's encryption of the message. With public keys from each chain merge operation and message by each operator, Eve's panoptical eavesdropping loses track of the messages. Only 1 in every 'N' of operators needs to be trusted with traffic information. Although sometimes Eve can collect statistics on a large number of messages to finally guess who is talking to whom.

The communicating parties can also be mutually anonymous and with normal encryption they do not need to trust any other party in the content of the messages. Sending confidential messages is necessary so that some of the privacy features of Chaumian credentials and bearer settings are strongly enforced on a real network. Another confidential messaging system from the 'Dining Cryptographers' network, also invented by Chaum.


An identifier that links only a small amount of information related to a person, usually information that the nickname holder considers relevant to a particular organization or community. Examples of n and m include electronic bulletin board nicknames, pen names, aliases, and brand names. A nym can gain reputation within his community. For example, a conglomerate can sell a wide variety of brands, each of which has a good reputation in its own niche. With Chaumian credentials, one nym can take advantage of the positive credentials of the other holder's nym, as evidenced by the 'is-a-person' credential.


Set of short identifiers with a simple syntax such as: telephone numbers, computer-readable internet addresses, human-readable internet domain names, etc.

Chaumianas Credentials

A cryptographic protocol to prove that one possesses affirmations made about himself by other nym, without revealing links between those nym.

Credential 'is-a-person'

In Chaumian credentials, the true name credential is used to test the nym connection (otherwise they would be dissociable) to prevent the transfer of nym between agents.


A focus of darkness and control; a random number drawn from a namespace so large that a lucky guess is highly improbable. Half of the public key of an asymmetric key pair can also act as a node.


Information pattern used to identify a particular body, such as a fingerprint, autograph, retina scanner, passwords, etc.


Proof that you are communicating with an agent who has a particular password.

Secret key cryptography (symmetric)

La symmetric cryptography, uses a shared key between agents to communicate with confidentiality and authentication.

Public key cryptography (asymmetric)

It uses two keys, the private key and the public key. The public key is used to encrypt objects and to verify digital signatures. The private key is used to decrypt and sign objects, and is normally kept secret by one more key holders. Allows key distribution without exposing the key.

Secret sharing

Method of dividing a key (and therefore any object encrypted with that key) into 'N' parts, of which only 'M' is needed to recreate the key, but less than 'M' of the parts provide no information on the key. A powerful tool to distribute control over objects among agents.

Digital signature

Cryptographic protocol based on public key cryptography that proves that an object is in active contact with the private key; corresponding to the signature: the object is actively “signed” with that key. It probably should have been called a "digital mark" or a "digital stamp," since its function more closely resembles those methods than an autograph.

A little compromise

A variant of digital signatures, used to confirm an object, such as a promise or a prediction, without revealing that object until later. It is impossible to unobservably violate the protocol or modify the object after it has been commissioned.

Blind signature

Digital signature protocols and secret key encryption that together have the mathematical property of commutativity, so that they can be stripped in the reverse order of their application. The effect is that Bob "signs" an object, so he can check generally, but can't see its specific content. Typically, the signing key defines the meaning of the signed object, rather than the content of the signed object, so Bot doesn't end up signing a bank check. Used in digital bearer instruments, where Bob is the Chaumian clearing and credential agent, where Bob is the credential issuer.

Digital carrying instruments

Objects identified by a unique key and issued, cleared and reimbursed by a clearing agent. When an object is transferred, the transferred can request the clearing agent to verify that the key has never been deleted before. And with that, a new key is issued. The clearing agent prevents multiple clearing of individual objects. But you can prevent it from linking specific objects to one or both of the compensation nodes that transferred that object.

These instruments are presented in an "online" variety, compensated during each transfer and therefore verifiable and observable, and an "offline" variety. It can be transferred without being compensated, but it is only verifiable when it has finally been compensated. Disclosing any clearing name of any intermediate holder who has transferred the object multiple times (a default). The privacy of the clearing agent can take the form of assignee-unlinking, transfer-unlinking, or 'double blind' when both the transferor and the assignee are unlinkable by the clearing agent. Digital cash is a popular form of the digital carrying instrument.


Immediacy. Like the one that provides the online compensation of digital instruments to the bearer. I deal with the agents that one knows best. The treatment in your specialty area.

Hot Backup

A backup service that is brought online in case of failure of the current service. It is normally activated with a dead man switch.

Zero-Knowledge Interactive Proof (ZKIP)

A cryptographic protocol that can be used to prove that an agent owns a key (and by implication weaker) than agents who normally function otherwise and who have an incentive to respond adequately to the challenge, but who do not, do not possess the key). This without revealing any information about that key. It is currently used for authentication and in smart weapons for the identification of friends or enemies (IFF).

Smart property

Software or physical devices with the desired proprietary characteristics embedded in them. For example, devices that can be rendered for agents who do not possess a key. As demonstrated by an interactive zero knowledge test. Intelligent property implementation methods can include ONDs and recorded immobilizing or destructive devices. These can thwart attempts to bypass the property.

Data required for the operation (OND)

Data necessary for the operation of the smart property. For example, a complex and proprietary firing sequence required to operate a computerized engine, a CAD file required to manufacture a specialized part, etc. To prevent theft of the service, ZKIP must open an encrypted channel on the device. To prevent the OND from leaking to Eve, tamper detection combined with a deadman switch can be used at the end of the channel device.

Smart Lien

Share smart ownership control between the parties, usually two parties called the owner and the lienholder. This property may be in the immediate possession of the owner or the pledgee. The notions correspond to customary law of 'craftsman's lien' and 'innkeeper's lien', respectively. It can be used to secure lines of credit, insurance policies, and many other types of contracts involving smart properties.


Represents a basic asset, such as a portion of property (stocks) or debt (bonds, cash).

Contingent contract

It contains terms that depend on the choice of one of the parts or a state of the world. One option is an example of a contingent contract.


A call or put option, a future or synthetic asset; such contract is 'derived' from a basic underlying security.

Synthetic active

A derivative constructed or 'synthesized' by combining values ​​and other derivatives. Cash flows for sophisticated synthetics can be calculated with great precision, using fine-grained decision trees.

Cash flow

The expected sequence of payments according to the terms of a contract. The basic financial objectives of a contract, such as the net present value, can be calculated from the cash flow.