Hello guys, while i'm researching, i will share with you the knowleage that i understand Smart Contract.
Today, i will talk about overview The Smart Contract. We will answer 4 questions in the below:
1. What are Smart Contracts?
2. A Brief history and how Smart Contract work?
3. Why we should be used Smart Contract?
4. Where can Smart Contracts be used?
What are Smart Contracts?
A smart contract is a computer protocol intended to digitally facilitate, verify, or e4nforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties and the risk of censorship.
A smart contract is a set of computer code between two or more parties that run on the top of a blockchain and constitutes of a set of rules which are agreed upon by the involved parties. Upon execution, if these set of pre-defined rules are met, the smart contract executes itself to produce the output. This piece of code allows decentralized automation by facilitating, verifying, and enforcing the conditions of an underlying agreement. Smart contracts allow you to exchange anything of value including money, shares, property etc, in a transparent manner eliminating the need for a middleman and keeping the system conflict-free.
For example: When you buy a house, you must to have a contract and need to third party has the legal authority of the state to confirm. However, if you use the Smart Contract, you can make transactions transparently and safely without a third party.
A Brief history and how Smart Contract work?
A brief history:
- A Smart Contract was described by Nick Szabo in 1994, long before the appearance of blockchain teachnology. According to Szabo’s conception, smart contracts are digital protocols for information transfer. Using mathematical algorithms to automatically execute a transaction when a conditions was established and controlled the process. However, in this time, there was not enough technical integrated everything until the Blockchain technology and the arrival of Ethereum that his idea of Smart Contract was popularized to the masses of users, providing us with a new way to establish contracts.
- it was not the appearance of of Blockchain technology and the arrival of Ethereum that his idea of Smart Contract was popularized to the masses of users, providing us with a new way to establish contracts and remains accurate to this day
How Smart contract work:
- The Smart Contract doesn’t have a private key, it allows you to control the funds on it. Whatever happens in this account is controlled by the code inside and this code cann’t be changed. So that if you have't detected bugs in smart Contract yet and it is published, you can’t fix them and deploy again. In this case, you only can created a new Smart Contract. Smart Contracts are immutable.
- Smart Contracts are designed to operate on data provided by the blockchain. Its can communicate with each other and interact.
Why we should be used Smart Contract?
The Smart Contract allow for the exchange money, goods, real estate and others. The Smart Contract is stored and replicated by distributed database in the internet which informations can’t be changed or deleted. Data encryption ensures the anonymity of the parties to be secret and safety.
- Speed: Smart contract assume an automated process and without human factors.
- Independence: Don’t need third-party, Smart contract can eliminate risks and ensure the integrity.
- Reliability: Data is entered in the blockchain can’t be changed or deleted. If one party doesn’t complete their obligations, the other will be protected by rules was created in smart contract.
- No errors: The system is auto executed transactions and ensure high accuracy.
- Savings: You mustn’t pay whatever fee for third-parties
- Lack of regulation: The international legal haven’t appear whatever about the concepts of Blockchain, Smart contract and cryptocurrency.
- Difficulty of implementation: Integrating smart contract take a lot of time and money.
- Can’t change: It’s a one of advantages. However, if one a party has a more advantages agreement, they won’t be changed the contract. For this reason, developers have to make new blockchain and implemented supplementary agreements.
Where can Smart Contracts be used?
With advantages, smart contracts is used many fieds:
- More and more.
Thank you for reading!
Next post, we will get start with Smart Contract!