With
all the Blockchain
Technology application development hype, one thing that gets thrown
around a lot is Smart Contract. It’s a most unique feature of blockchain act as
a decentralized system which is shared between all the parties of the network
and eliminates the involvement of third-party intermediaries.
Smart
Contract is very propitious system offered by Blockchain though it has its own
set of issues that are yet to be resolved, but it provides faster, cheaper and
more efficient options as compared to the traditional systems. Because of this
banks and government bodies are also turning to blockchains.
If
you’re no cryptocurrency expert or a geek who always keeps eyes on the latest
trends than first you should understand what exactly are these contracts, and
what makes them smart? This blog aims to throw some light on what a Smart
Contract is, mostly from an end-user perspective.
A
Smart Contract is a digital form of any contracts; it helps you in transferring
money, property, shares, or anything of value in a transparent way by avoiding
the involvement of a middleman.
Smart
Contracts were introduced by Nick Szabo, a legal scholar, and cryptographer in
1994.
Let’s understand it with this example:
Usually,
for any contract, you would go to a lawyer or a notary, pay them, and wait
while you get the document but with a Smart Contract, you simply drop a bitcoin
into the ledger, and your boon, driver’s license, or whatever drops into your
account will come out without the involvement of the third party.
The
code of Smart Contracts contains all the terms and conditions in which parties
agreed and the information about the transaction. All the information is
recorded in a Blockchain, a decentralized, distributed public ledger.
Properties
of Smart Contracts are:
·
Self-verifiable
·
Self-executable
·
Tamper Proof
Who Uses Smart Contracts?
Smart
Contracts have made phenomenal changes in our daily lives by offering multiple
advantages over traditional contracts. These are convenient, faster and
transparent which makes them acceptable for people to streamline it in their
workflow. Today almost all industries are using Smart Contracts and Blockchain Ledger
Technology as it is a perfect blend of security
and ease of Blockchain Technology Applications.
By
eliminating the needs of intermediaries,
Blockchain Technology in Financial Services and Smart Contracts have become
more compelling therefore its usage is likely to gear up with the advancement
of technology.
How Do Smart Contracts Work?
Image
Source: Google
Smart
Contracts works like a vending machine. All you need to do is to put
cryptocurrency into the contract along with all the necessary information that
you want to keep as a record. Also, you have to define the set of rules, terms,
and condition before any contract is ready.
A
Smart Contract can work as a single or as well as a group of Smart Contracts.
The single one will work independently while in a group concern person has to
depend on each other to complete any task.
Some Blockchain
Application Development Company already
has set a couple of Smart Contracts and blockchain together to reinforce the
features of Fintech mobile applications.
Benefits of Smart Contracts
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