WHAT IS BLOCKCHAIN?
It is a code of a computer, we can any sort of logic in it like if-then,if-else. We can use every logic in smart contracts. They are basically used to automatically execute the agreement, so all the people working in it can be sure regarding the outcome, without any sort of time consumption.
It is also known to be the self-execution program that relies or depends on if-then logic. Moreover if once your contract is deployed after no one can change or alter it.
Learn More: Blockchain Development
HOW DO SMART CONTRACTS WORK?
To explain to you about Smart Contracts we will first look at an example of a Vending Machine for clear knowledge (You probably input some expense to get the product using Vending Machine, the products are bound to execute when the coded amount is input otherwise no product will be executed and it doesn’t require any sort of third-party system. So by using the Smart contracts we have to follow a similar system that doesn’t require a third-party system like e.g like Vending Machine.
The supporters of a project can now easily transfer their money to Smart Contracts. If the project is funded successfully then the Contract automatically passes the money to the creator of the project. And if the project is unable to achieve the conditions then the money will definitely go back to the supporters. And because the Smart Contracts are stored on a Blockchain so everything in it is secure and no one can alter it.
SMART CONTRACT USES:
GOVERNMENT VOTING SYSTEM:
By using smart contracts on the government voting system we can get a secure environment making the voting system more secure and trusted and no one can manipulate it. Smart contracts words would be ledger-protected and incredibly impossible to decipher.
Due to the online system, more people can give their votes, especially the aged ones as they are not bound to go to the voting stations physically and the number of voters can be increased. Moreover, the turnover of votes can also massively get increased by smart contracts voting system as the voters will not be bound to stand in long queues. So definitely Smart Contract Voting system increases security and provides an ease to the voters.
HEALTHCARE:
Blockchain has the ability to store the data records of the patient by using a private key. Only specific users can get access to that record for privacy concerns. So similar research can be done securely using smart contracts, on the other hand, we can also use smart contracts more deeply in healthcare services by controlling supplies, supervising drugs, and sharing the report with the insurance companies for evidence.
SUPPLY CHAIN:
(Smart contracts are particularly beneficial in three areas of a supply chain):
1) Payment procedures:
When a pre-defined condition is met, a smart contract then executes the payments.
2) Making ledger entries:
It keeps all the records of modifications such as data from IoT devices, manual changes, and timestamps.
3) Alerting for manual intervention:
Smart contract parties are informed when manual or physical intervention is required. For example, when an IoT device detects or catches an out-of-range temperature, it signals all stakeholders, lowering supply risk.
Applications of Smart Contracts
Businesses can take many advantages by using Smart Contracts in many different ways:
Medications
Smart Contracts help us in lowering problems regarding the transportation of medications. It can be achieved by increasing security across the supply chain.
Supplier-Retailer Relationship
Smart Contracts play an important and main role in the development of good relationships and remove barriers between suppliers and retailers. With time-consuming communication and increased security in the supply chain, it can help in the resolution of disputes.
International Trade
Smart Contracts help to develop a more user-friendly trading experience.
Advantages of Smart Contracts
There are many benefits or advantages of using Smart Contracts which make them more trustworthy and secure. There are many benefits such as:
1) AUTONOMY AND SAVING:
Smart contracts do not require the third-party intervention of intermediaries to pass or confirm the agreement like the traditional system, which help us reduce the amount of scam from third parties or any sort of manipulation. Furthermore, due to having no system third-party, it helps the customers to increase the working process and also results in cost reduction.
2) SECURITY:
Smart contracts have the power to conduct functions depending on several parameters, security concerns are unavoidable. To build a secure smart contract, the code must be resilient and suited to the purpose. With the correct assistance, you can extensively test the code to verify that it will be executed effectively if pre-established terms and conditions are met.
Smart contracts can be hacked or fail due to errors in fundamental programming. As a result, developers often employ a single auditing service to verify contract coding step-wisely for potential issues. To enhance security, data encryption can also be employed to store transactions on the blockchain.
3) BACKUP:
Many times in a physical ledger important information have a chance to get lost or misplace but by using Blockchain smart contract ledger all information stored in it is duplicated several times so it can definitely help the user to back up the information in the case the information deletion.
4) ACCURACY:
Many times storing the information manually on a ledger have a chance of getting a human error such as spelling mistakes and missing main words but by using Smart Contracts the information stored in the ledger automatically error-free can occur due to several reasons such as manual filling of numerous forms.
5) IMMEDIATE EXECUTION:
By using Smart Contracts, the terms are written as computer code and are executed when the required criteria are met. It’s a binary system. When the requirements are met, the computer code promptly executes the requested action. Smart contracts can assure that specified results occur once the needed or requires criteria are met, from releasing payments to transferring ownership.
6) TRANSPARENCY
Smart contracts are based on the blockchain procedure, they guarantee the immutability of data allowing the contracts to be done without any need to first know each other and also reduce errors and avoid repetition.
7) SPEED:
The absence of any sort of distribution regarding the intermediaries will help the customer to save time compared to the contracts that are done manually with the presence of the third-party system.
8) COAST REDUCTION:
By using a Smart contract the customer does not need to rely on a third party to verify the terms which help them to save extra charges and reduce the cost.
9) Paper-free:
The execution of paper-based contracts is often tediously slow. When certain conditions are met, they require the involvement of a third party. The problem with paper contracts is that they must be accepted by both parties. Only a digital signature is required for smart contracts.
HISTORY OF SMART CONTRACTS:
In 2013 a 19-year-old programmer name Vitalik Buterin joined the smart contract with the Blockchain. In 1994 a developer name Nick Szabo introduced the concept of a Smart contract in front of the world. But in 2015 the first time the Ethereum Blockchain Smart contract concept was used. They work similarly to traditional or old-style agreements.
SMART CONTRACTS CONCLUSION:
In the end, no doubt that the growth of Smart Contract is bringing many benefits to the audience as they can now save themselves from fraud and scams e.g in the VOTING Systems as it is very difficult to alter or to change. Moreover, smart contract helps to boost the relationship between the retailer and the customers by providing long conservation facility.
On the other hand, it also helps to save costs from the third parties by disabling them as they demand their commission so this action definitely helps to save time and is much more cost-effective. And definitely, Smart Contracts is having a future coming due to growing awareness.
