‘Smart contracts’, are programs that are written on the underlying distributed ledger and are executed automatically by nodes on the network. Smart contract have to be verifiable by each node on the network, it means that all nodes on the network must see the same data. Smart contracts are complex and their potential goes beyond the simple transfer of assets, being able to execute transactions in a wide range of fields. Such as insurance, crowdfunding , logistics, medicine, gaming industry, entertainment industry, etc.
As per our point of view the best explanation of smart contracts is comparison the technology to a vending machine. In regular life , you would go to a accountant or a notary, pay them fiat money, and wait while you get the document. With smart contracts, you just drop a crypto currency into the “vending machine” (i.e. ledger), and your escrow, personal ID, or driving license etc. More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations.
The phrase “smart contracts” was coined by computer scientist Nick Szabo in 1996, and reworked over several years. Szabo’s first publication, “Smart Contracts: Building Blocks for Digital Free Markets” was published in Extropy #16 and then later reworked as “Formalizing and Securing Relationships on Public Networks. Smart contract technology is booming with the release of Ethereum and programming languages such as Solidity and Serpent, that have made contracts much simpler to build and deploy.
Here is the code for a basic smart contract that was written on the Ethereum blockchain. Contracts can be encoded on any blockchain, but Ethereum is mostly used since it gives unlimited processing capability.
The contract stipulates that the creator of the contract be given 10,000 BTCS (i.e. bitcoins); it allows anyone with enough balance to distribute these BTCs to others.
You are always welcome to contact us.
Subscribe to 482.solutions blog
Get the latest posts delivered right to your inbox