Smart Contracts in Blockchain Technology
What is Smart Contract?
It is also known as Cryptocontract. It is a computer program that controls the movement of digital assets instantly, and directly among the parties under specific conditions.
It was introduced by a cryptographer named Nick Szabo, in 1994. He used the application of a redistributed ledger, for smart contracts. These agreements can be written in code that can be saved, and copied on the system and monitored by the computer networks, that develop the blockchain. get more through blockchain online course
Working of Smart Contracts in Blockchain
A smart contract is a digital agreement, that uses the security coding of the blockchain. It contains information and permissions written in code, that needs a correct order of events to activate the agreement, specified in the smart agreement.
This agreement is enclosed in the blockchain which makes it clear, unchangeable, less cost and re-distributed. The blockchain contains the address of each smart contract.
With the help of the contract address, we can communicate with the agreement imagining that it is transmitted, in the network. Bitcoin network was the first to use some type of smart contracts, for transmitting value from one person to another.
It uses key conditions like verifying whether the amount of money to be transferred, is present in the sender’s account. The idea used for this is very easy. They are executed depending on a simple logic of IF-THEN:
If you send me the object B, then the sum will be transferred to you
If you give a specific amount of digital assets, then the B object will be exchanged to you.
If I complete the work, then the digital assets specified in the agreement will be exchanged to me.
We can add When condition to add the time parameter in the smart contracts. This helps us to set conditions when it is necessary to satisfy the terms of the agreement, that has to be executed. We can use IF or THEN as many times as we can, in our smart contract.you can more through blockchain online training
Features of Smart Contracts in Blockchain
Savings –Using this, we can save money, as they remove third parties in the process, and there is no need to spend money on paperwork also.
Safety- Cryptography ensures that the assets are safe. If anyone breaks the encryption, then the attacker has to change all the blocks that are present, after the block that has been changed.
This is very difficult and involves deep calculations and in reality, it is impossible for a small or medium-sized company to do.
Autonomy- In this, there is no involvement of third parties. The agreement is created by us and distributed among the parties. As there is no mediator involvement, it reduces any harm and gives full authority to the dealing parties.
As it is managed and executed by all the nodes on the network, it removes all the controlling power from any one party’s hand.
Backup- In Blockchain, each node has the shared ledger, so it provides the best backup.
Speed- To perform tasks, smart contracts use software programming, which reduces the time to operate with complete processes, that are related to human interaction.
As everything is coded, the time taken to complete work is the same as the time taken for the code to execute, in smart contracts.
Accuracy- These are accurate to the extent, the programmer has coded for execution accurately.
Trust- The smart contract is protected, as it is enclosed in the blockchain itself.
Some Applications of Smart Contract
It can be used in Government elections, Once the votes are recorded in the blockchain, it is very difficult to decrypt the voter’s address and change the vote, which prevents bad practices during elections.
It can also be used in the music industry. It can save the ownership of music. A smart contract is enclosed in the blockchain and the powers can be given to the owner’s account if a song is used for business purposes. It also helps in reducing the disputes for ownership.
A smart contract is used by many platforms like Bitcoin, Ethereum, Nxt, etc.
I hope you have understood how smart contracts Blockchain work and their features. I will share about Ethereum Blockchain in my next article. Follow my articles to get more updates on Blockchain. get more through blockchain course