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Smart Contract

Posted June 14, 2022 Gyan Prakash
Smart Contracts

What are Smart Contract and how it works?

Introduction

In this current era Smart Contracts are gaining a unique prominence. Blockchain stores digital contract in the form of smart contracts. In addition, Smart contracts include executable terms and conditions. They run automatically without any intervention of a third-party. The reason being, use of it is prevalent in a number of sectors such as the government voting system, healthcare, supply chain, financial services, etc. to resolve the issue of complex and mass transactions.

Smart Contract
 

What is a smart contract and how does it work?

A smart contract is an agreement that involves two parties. It is in the form of executable code kept on a public database and that could not be changed by any party. Along with this, the smart contract processes the transactions automatically when the agreed conditions between both the parties are met. Thus, there are no issues of trusted parties while using the smart contracts.

How are they safe?

Due to its decentralized nature, no any central party could control smart contracts. Moreover, the hackers cannot hack them easily because in order to hack they need to hack more than half of the nodes of the blockchain. The reason being, It runs in a safe and automatic manner.

Benefits of smart contracts

Basically, a smart contract is a set of protocols that facilitate automatic verification, and execution of an agreement between two parties. It can be beneficial to the stakeholders as below:

Accuracy

The automatic execution of it eliminates errors unlike manual contract filling.

Speed

Its execution is speedy enough to save hours of business personnel’s.

Safety

It is safe from infiltration due to encrypted contracts.

Autonomy

The end parties can enjoy high autonomy due to elimination of intermediaries.

Platforms supporting development of smart contracts are:

There are multiple platforms that support the creation of smart contracts including Ethereum, NEO, Hyperledger, Waves etc.

Ethereum

Ethereum is the most prominent platform for building smart contracts. It provides a decentralized virtual machine that executes code using an international network of nodes. Solidity is the smart contract language of Ethereum that helps the developers to create easier and less riskier contract. Above all, Ethereum based smart contracts are the first preference of the blockchain developers.

NEO

NEO is not much recognized across the world. Moreover, it offer trustless smart contracts and financial transactions that are intricate in nature. It offer developers the ability to write contracts using already known programming languages. Along with this, it facilitates a simple and user-friendly platform for smart contract development.

Hyperledger

Hyperledger is an open source platform to create and develop distributed ledger frameworks for supporting business transactions. Linux Foundation hosts Hyperledger to deliver plug-and-play membership services. In other words, Hyperledger provides a set of tools and programming languages to support easier development like Ethereum.

Waves

Waves is an open-source platform like Hyperledger. Moreover, it focuses on speedy and scalable mainstream blockchain implementation. Along with this, It prevents a smart contract from changing the behavior of another smart contract through tokenization.

Conclusion

Smart Contracts can eliminate the burden of managing the cumbersome transactions in an automatic manner. In addition to this, It can provide a secure environment for making transactions and accelerates the business processes. Now, the stakeholders do not have any need to prepare, maintain, and execute the contracts manually as they are self acting. It eliminates the intermediaries to sustain the autonomy of the contracting parties. In conclusion, it can also facilitate extensive opportunities for the stakeholders to conduct smooth business operations globally.

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