What is a Smart Contract?
What is a Smart Contract?
A smart contract is a contract management protocol. A smart contract is a special set of protocols that aim to contribute, validate, or negotiate and execute a contract. Smart contract allows us to deploy the transaction without the need of an intermediary third party. These transactions are easily traced and cannot be tampered with or reversed.
The smart contract contains all the details about the terms and executes them automatically.
The idea of Smart Contract.
This idea was originally given by computer scientist and coded Nick Szabo in 1994. He pointed out the main operational principles, but at the time there was not enough means and environment to realize all.
However, things have changed with the birth and development of Blockchain technology.Bitcoin has laid the foundations for building contracts on Blockchain.
However, it still can not satisfy all requirements. Only when Ethereum appeared, the idea of a new smart contract was made available to all users, providing a new way to set up a contract.
How does Smart Contract work?
The operating principle of a smart contract can be compared to a vending machine. They only execute commands that have been pre-programmed.
First, assets and terms of contract are encrypted and transferred to a Blockchain block. This smart contract will then be distributed and copied by the nodes that operate on that platform. Once the order has been received, the contract will be implemented in accordance with the predefined terms.
At the same time, the smart contract will also automatically check the implementation of contractual commitments. What do I need to do to be able to set up a smart contract? To set up a smart contract, you need:
• The subject of the contract
Programs must be able to access the products / services listed in the contract so that they can be automatically locked or unlocked.
• Electronic Signature
All parties agree to implement the agreement with their individual courses.
• Terms of contract
The terms of the smart contract are a series of activities. The parties to the contract must sign to accept it.
• Decentralized platform
The completed contract will be uploaded to Blockchain of the corresponding distribution platform and distributed to the node of the platform. How to implement smart contract in real life? Smart contract can be integrated into many areas:
Voting results will be sent to Blockchain and distributed to the nodes in the network. All data will be encrypted and completely anonymous. This method can eliminate conspiracy to manipulate the election.
As we all know, the supply chain where a system extends and consists of many different links. Each affiliate needs to be confirmed by the former to be eligible to perform part of their work under the contract. This is a long and inefficient process, but with a smart contract, each participating unit can track workflows to complete tasks on time.
Smart contract guarantees transparency in terms of contracts, fraud prevention. It can also provide us with the ability to monitor the supply chain if it is integrated with the Internet of Things. Besides that, Smart contract also have many other applications, such as management, banking services, insurance, real estate, and so on.
What are the benefits of Smart contract?
Smart contract uses all the strengths of Blockchain technology.
Smart contract is encrypted and distributed to nodes. This ensures that it will not be lost or modified without your permission.
• Economical and fast
Most of the stages are automated, and almost completely eliminated by the intermediary.
There have been a number of different smart contract forms. Users can choose a style and change to best suit their needs. Where can I create a smart contract? Today, smart contracts are being implemented in most blockhouses with varying degrees of flexibility.
They differ by their capabilities, the variety of smart contract templates, and the programming skills required. Today platforms such as AGC are improving and developing towards:
• Full transaction support
The support team will help you at all stages if you have any issues or questions.
• Suitable for those who do not know how to program
Most platforms require programming skills or programming services.
• Be ready to adjudicate
Resolving conflict is a weakness for many platforms. Third party involvement requires extra wastage of time and resources.