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If you have been even a little bit active on the Internet lately, you would know that people are showing an insane amount of intense interest in the Blockchain Technology. If you wanna know why then here is a short read about it.
Due to the interest in blockchain technology, there are several applications of blockchain that have caught an eye of the public. One such application of blockchain technology is Smart Contracts.
What are Smart Contracts?
Traditionally, we have always had a centralized model. In a centralized model, the central authority might be the government or the bank or some other kind of third-party authority. Due to this dependency, one can not guarantee a perfect implementation of the contracts. But the development of blockchain has allowed us to build decentralized models and this is where smart contracts come in. The term ‘Smart Contract’ first appeared over twenty years ago in an article written by Nick Szabo, a computer scientist and cryptographer, all the way back in 1995. So what exactly is a smart contract? A smart contract is just like a physical contract except it’s digital. A smart contract is represented by a small computer program saved inside a blockchain. A smart contract store the rules for negotiating the terms of an agreement. It automatically checks fulfilment and then executes the terms that were agreed upon by the two parties.
For example, in a system of crowdfunding, a smart contract can be programmed to receive funds until a goal is reached. Once the goal is reached, the money is sent directly to the project team. If the project fails, the money goes back to the supporters without the intervention of a third party. Since a smart contract is stored inside a blockchain network, where all data is stored in a distributed way, no one is in total control of the capital.
Bitcoin gives a programming language that provides custom smart contracts like multi-signature accounts, payment channels, escrows, and time locks. There’s also a separate smart contract platform called RootStock built on Bitcoin’s blockchain.
Ethereum is the most leading smart contract framework, built and planned primarily to encourage smart contracts. Ethereum is a platform programmed in the Solidity language that runs smart contracts without any likelihood of downtime, restriction, cheat, or any third-party interference whatsoever.
Smart contracts are becoming popular and could change the way we function right now. It could primarily alter the fields of banking, healthcare, supply chain, legal systems, real estate, government as well as the internet of things. Obtaining the properties from the blockchain, smart contracts would not only provide distributed storage but also offer immutability giving itself an edge over traditional agreements. These characteristics are getting the smart contracts recognized and would make it a credible means for developing business agreements and performing transactions in the near future.
We hope you found this article interesting and informative. If you still have any queries, you can contact us or directly send a mail to firstname.lastname@example.org for further inquiries regarding smart contracts or Ethereum or blockchain and share your ideas with us. Let’s get together and create a better future together.