“If blockchain 1.0 is considered as the record keeper of the past, the smart contract oriented blockchain 2.0 is the record keeper of the future. The smart contracts have given us the capability of determining the future of any business transaction in a trustless manner”.
Smart Contracts: The Origin
The smart contracts proposal was first proposed by Nick Szabo in 1994 but due to his inability to execute it at that time, it was not realized into something practical. In 2013 Vitalik Buterin was the first person who proposed to develop a smart contract platform known as Ethereum. Since, then various blockchains have been eyeing on implementing these smart contracts on their block
Smart Contracts: The Description
Smart Contracts are the technological innovation that can break boundaries created by various business limitations. If blockchain 1.0 is considered as the record keeper of the past, the smart contract oriented blockchain 2.0 is the record keeper of the future. Smart contracts are the digital contracts that are stored on a blockchain and are automatically executed if certain pre-defined conditions are met. This means that if a business transaction is to be executed sometime in future on the basis of pre-determined conditions and without the intervention of any business entity, smart contracts can do that without including the factor of trust. This creates a certainty about an outcome in the future as the smart contract becomes the record keeper of the future.
The smart contracts have multiple uses and can be used in various agreements including releasing funds to the appropriate parties, registering a vehicle, sending notifications, or issuing a ticket or any business transaction you can think of. The smart contracts provide blockchain the capability of keeping the record of the future events and perform actions when certain events trigger. This ensures that the trust is always intact as there is no reliance on third parties for execution of the contracts.
Smart Contracts: The Future Potential
The journey of smart contracts has just begun and it has a huge potential for the future, the following benefits will be reaped through the implementation of the smart contracts on the blockchain:
Speed and Accuracy
Once a condition is met, smart contracts executes immediately without delays and as they are digital, there is no chance of error as in the case of manual documentation filling.
Trust and Transparency
As, there is no third party involved, there is no chances of alteration to the contract and breach of trust. Also, the contract is distributed on the blockchain that can be viewed by any party involved making it transparent.
Smart contract transactions are encrypted and due to the blockchain technology, the data is immutable and cannot be altered, this ensures utmost security. For an attacker to alter a single transaction, complete blockchain has to be altered which is not possible.
As there is no requirement for an intermediary in a smart contract execution, it saves time in execution and at the same time cost in terms of fee of the intermediary.
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as a financial advice. Own research on the topic is advisable.
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