What are smart contracts, how they work and why the future belongs to them.
Blockchain is a decentralized system that exists thanks to many networked computers. Therefore, one of its main advantages is that you can avoid paying intermediaries and save your time and nerves.
It says that the creator of the contract must receive 10 thousand bitcoins. This contract allows anyone with sufficient funds in the account to transfer bitcoins to other people.
Practical application of smart contracts
Using smart contracts, you can simplify work in many areas of life, including logistics, management, law, and even elections.Elections
According to experts, it is almost impossible to falsify the election results, however, thanks to smart contracts, it is possible to completely exclude the possibility of external interference in the voting system.
In this case, the voter votes will be placed on a distributed ledger and will require exceptional computational power to decode them. Such computers do not exist, so it will be impossible to hack into this system.
Management
Blockchain not only offers a reliable and transparent shared ledger, but also helps to avoid misunderstandings when working together or situations where the parties draw up contracts independently.
Logistics and supply
Bitcoin Core protocol developer Jeff Garzik says:
“UPS can execute contracts that say,“ If we get paid to ship a product, then the manufacturer, who is many links up the supply chain, will immediately start creating a new such product, since this one has already been delivered to its destination. ”
Procurement too often suffers from bureaucracy, when different forms must be approved in multiple instances. Because of this, fraudsters get the opportunity to make money, and companies incur losses. Blockchain avoids these problems, as each participant in the supply chain gains access to a secure electronic system that monitors work execution and payments.
For example, Barclays Corporate Bank uses smart contracts to register the transfer of ownership and automatically transfer payments to other financial institutions.
Cars
Think about a future where everything will be automated. Google is already building it, making smart phones, smart glasses and even smart cars. And this is where smart contracts come to the rescue.
Take self-driving or self-parking vehicles, for example. Smart contracts will determine who is responsible for the accident: the sensor or the driver, and will also help in resolving any other situations. With smart contracts, insurance companies can set premiums based on where and under what conditions drivers drive vehicles.
Other areas
Other industries such as acquiring, lending and accounting will also use smart contracts - for example, for risk assessment and real-time auditing. Lawyers will be able to move from drafting traditional contracts to creating standard samples of smart contracts. And on the Blockchain Technologies website, smart contracts have turned into an electronic-paper hybrid: they are confirmed by the blockchain and receive material embodiment in the form of a paper copy.
Patrick Hubbard, Chief Product Officer and Senior Product Marketing Manager at SolarWinds:
“The Yangon Stock Exchange in Myanmar makes payments through a distributed ledger. Of particular interest are those blockchain functions that go beyond the traditional use of the technology. So at the Yangon Stock Exchange it was possible to solve the problem of settlements made at different times in the trading system, which synchronizes trades only twice a day. Due to the fact that smart contracts themselves ensure the execution of transactions, blockchains with their reliable transaction system can be used in situations where complex operations are required, depending on various changing factors. This is why Amazon, Microsoft Azure and IBM Bluemix are focusing so much on developing blockchain as a service cloud technology. "
Cons of smart contracts
Smart contracts are far from perfect. What if there are errors in the code? How should the government regulate these contracts? And how will it levy taxes on such transactions?The list of possible problems is not limited to this. Experts are trying to solve all the issues, but such difficulties alienate many potential users.
Blockchains where smart contracts can be concluded
Bitcoin: An excellent blockchain for transactions with bitcoins, but the possibilities for working with documents are limited there.Side Chains: Another name for blockchains, parallel to Bitcoin, which provide somewhat more opportunities for working with contracts.
NXT: It is an open blockchain platform with a limited number of smart contract samples. You can only use what is there; you can't write your own code.
Ethereum: An open blockchain platform that is best suited for writing and working with smart contracts. You can create any program, however, you will have to pay for the computing resources of the platform with ETH coins.
Since the first digital currency Bitcoin was introduced to the world in 2009, it hasn't been that long. But this short time has brought a lot of new things into the life of mankind. It cannot be said that these innovations have covered all 100% of the world's population, but they have ceased to be something available only to a narrow circle of specialists. In any case, the days have passed when the overwhelming majority of users knew only the word "Bitcoin", and few people understood what was behind this word.
Now many are already interested in the crypto sphere, follow its development, delve into the essence of the processes taking place there and do the right thing. Because the range of application of new technologies and new financial instruments is constantly expanding, and soon they will enter our everyday life and it will be very difficult, if not impossible, to do without them.
To make our contribution to the elimination of general cryptocurrency illiteracy, we decided to tell you about such an interesting and useful phenomenon as "smart" contracts or, as they are also called, smart contracts.
It should be noted that the concept and term "smart contract" did not appear in connection with the beginning of the cryptocurrency era. It happened much earlier, back in 1994, and a certain Nick Szabo, an IT specialist, became the author of this term.
In simple terms, this concept implies a self-executing contract, based on a transaction that is triggered by one event or another (it can be anything, from another transaction to a weather forecast). If to complicate a little, then a smart contract is nothing more than a digital contract (a form of a computer algorithm) in the form of a code. His whole "life" is enclosed in the framework of the blockchain. It is supported and managed by a network of computers. All possible scenarios for the development of events are prescribed in it, and deception is impossible here.
They invented "smart" contracts in order to make it possible to exchange certain assets (money, valuables, real estate, etc.) without involving third parties. In the sense that under other conditions, the transfer of these assets will necessarily require the intervention of an intermediary who will keep them and monitor the implementation of agreements. And only when the agreed conditions are met, he will transfer the assets to one of the parties to the transaction. In such a simplified presentation, all this does not sound so scary, but imagine contacting notaries, paying for documents and waiting for their registration, contacting financial institutions, and in case of violation of the agreed conditions and in court, and you will understand how a smart contract simplifies and speeds up the procedure ...
Contracts, which are commonly called "smart", can be conditional and unconditional. Their differences lie in the difference in the conditions laid down in them, necessary to launch the programmed actions.
All the information necessary for the execution of a conditional option is contained in its "native" blockchain. And it doesn't matter what kind of information it is. It can be absolutely anything, the main thing is that it is concluded in the same blockchain within which the contract is executed.
Now about smart contracts of the second type, unconditional. Here data is requested from the outside, it exists outside. For example, the results of some elections, sports competitions, even the marriage of a popular singer. That is, any event, the execution of which will trigger the execution of the contract. True, in this case, among other things, there must also be a link between the real world and the blockchain, called a trusted oracle. It is the oracle that supplies information about the event that triggers the execution of the contract. Here, naturally, the problem of the user's trust in this or that oracle arises, although a decentralized way of obtaining the necessary information is not excluded (voting by a group of token holders).
Today, this type of agreement is used quite widely, affecting various spheres of human life. But there are several areas where their use is being promoted especially actively. These are trade, insurance business, elections, gaming industry, taxation, etc.
To cover the topic completely, we will give several examples of the practical application of "smart" contracts, from which it will become clear to you how they work:
- Trade (delivery of goods). It is no secret that in the modern world, the popularity of purchases in online stores is growing every day. This saves both effort and time, and often money. For the calculation, as a rule, cash on delivery is applied. If you are faced with such a situation, then you know that when paying for the goods you have to pay a slightly larger amount than the purchase price. If smart contracts are used, then the buyer does not have to overpay.
Everything happens in the following way. The required amount is debited from the buyer's account and transferred to the blockchain, where it is fixed and remains until you receive the goods. As soon as the purchase falls into the hands of the customer, the funds go to the seller's account. What is important is that different situations can be specified in such a document.
For example, you can set a condition according to which a significant delay in delivery entails a refund to the buyer. Or vice versa, if the buyer did not receive the goods on time, then a certain fine is automatically charged for this, the rest of the money is returned to his account, and the goods are returned to the seller.
- The sphere of gambling. A simple example. You have a friend and both of you are betting on the outcome of some soccer match. The bet amounts are debited from your accounts and are stored in the blockchain until the end of the game. Once the game is over, the results are verified by a smart contract and the winner receives the amount due.
If the teams drew, then the participants receive their money (bets) back. It would seem that there is a knurled betting scheme through the bookmaker, why do you need something else? Firstly, you do not have to pay a bookmaker for services (commission), and, secondly, there is no risk of getting on a dishonest bookmaker, which, unfortunately, happens from time to time.
- Property inheritance. We are all mortal and sooner or later we leave this world. After those who left, some property (real estate, money, etc.) remains, which they would like to transfer to specific heirs. Inheritance cases are usually handled by lawyers (executors). Their responsibilities include the transfer of inheritance into the hands of certain people, but with an unscrupulous approach of these persons, the will of the deceased may not be fulfilled or fulfilled in a slightly altered form (part of the property may be transferred to completely different people to whom it was bequeathed).
When using a smart contract, any violation or change of the will is excluded. After the death of a person, the contract verifies the register of the deceased and, if the fact of death is confirmed, then all the assets left by him are transferred into the possession of those people to whom they are intended for the deceased.
- Rental of property. If you need to rent an apartment or carry out any other real estate transactions, then a smart contract is very useful here.
Let's stop at renting a home. You (the tenant) and the apartment owner (landlord) enter into a smart contract for a certain time. The blockchain receives the amount of the deposit and payment for the first month of residence, after which the tenant, that is, you, receive the keys to your new home.
In order for the agreement to be fully implemented, the lock of the rented apartment must be connected to the Internet. If you do not pay for your accommodation on time, it will automatically be blocked. The deposit, after the end of the agreed rental period, will be returned to the tenant (you) or transferred to the landlord's account if you somehow violated the contractual terms (for example, damaged the furniture). These are only approximate main points of the contract. They can be much broader and relate to any points important for the parties.
There are a number of benefits of using smart contracts in various areas of our lives. We present you the main ones:
- this type of contracts provides users with independence from intermediaries; now there is no need to resort to their services;
- since smart contracts are on the blockchain, their conditions cannot be changed in any way, which is proof of their security;
- when concluding such agreements, there is an opportunity to save money, since the absence of intermediaries allows you to work out more favorable conditions;
- the parties to the transaction do not bear any costs, because the fulfillment of the terms of the agreement allows you to immediately exchange assets.
But this tool for building business relationships cannot be idealized. There are also disadvantages here:
- first of all, this is the lack of a legal status, because cryptocurrency is involved here, and not a single state has yet adopted it as an official instrument for carrying out financial transactions;
- each smart contract should provide for all possible situations and scenarios, that is, in complex transactions, the creation of such a document requires special attention and is not immune from mistakes;
- and, finally, a drawback that only time can fix - there are still very few users who understand the essence and advantages of smart contracts.
But the disadvantages listed above do not at all diminish the value and potential of the smart contract. There is no doubt that this technology for formalizing contractual relations will eventually gain a foothold in our daily life, but only as things are connected to the World Wide Web.
We tried to explain to you in a simple and accessible way the essence of such a concept as "smart contracts", and also showed the possibilities of their application using examples. Hopefully, we have been able to prove the necessity of using this technology in human everyday life. Indeed, with all the problems that are present in blockchain technology, its advantages over centralized systems are hard to miss.
As for the disadvantages listed above, they cannot be perceived as inevitable. Rather, these are temporary drawbacks. And the work of many developers around the world does not stop working on their elimination. Moreover, these efforts are already yielding results, and we will have better technology in the not too distant future. So the time is not far off when only a memory will remain of the old, obsolete forms of contracts, and humanity will en masse use their safe, reliable and accurate digital counterparts.
In the cryptocurrency world, the phrase "smart contract" is increasingly heard in the context of financial transactions, crowdsale, purchase and sale transactions, etc. What is a smart contract, what is a smart contract for, and how does this type of agreement work?
The concept of a smart contract: what is it
Smart means smart. Accordingly, the combination of Smart contracts means smart contracts - special algorithms designed to work in the blockchain environment and supporting the conclusion of self-executing contracts with control over their execution in accordance with the conditions introduced by the developers.
From a programmatic point of view, a smart contract is a set of code that exists on a blockchain supported by a network of computing devices.
Simple sample code:
Figure 1. Sample smart contract.
It says here that under the terms of this agreement, anyone can make a transfer for 10 thousand coins.
Smart contracts allow you to do without intermediaries in financial transactions. Thanks to the use of transactions, they can be easily traced, and they are completely transparent, while also being highly secure. Nobody can change or change the data.
What does a Smart contract consist of?
So, smart contracts - what are they internally?
As already mentioned, this is a kind of software container. It contains the following objects:
- The parties to the agreement (parties, or signatories, to the contract) - they confirm their participation in the agreement and their agreements by means of a unique digital signature.
- The subject of the contract is some object that resides in the smart contract system. It can be cryptocurrency or other assets, manipulations with which are provided for by the system.
- Conditions - an algorithm of actions, which is the logic of a smart contract described by mathematical methods and the sequence of its operation.
Schematically, the logic of a smart contract on the blockchain can be depicted in the following figure:
Figure 2. An example of an option smart contract.
How it works
The smart contract is executed in the blockchain - a distributed ledger of transactions. The logic is placed in the block of the chain, and this container contains all the operations on the network related to this smart contract. Messages entering or leaving a smart contract serve as triggers for launching certain actions and can initiate various operations in and out of the blockchain (depending on conditions).
Speaking about what smart contracts are and how they work, we should mention their mandatory attributes:
- the parties use an electronic digital signature with a set of private and public keys;
- execution takes place in a decentralized secure environment (for example, a blockchain), where the contracts themselves and related events are recorded that trigger certain actions according to the conditions;
- the subject of the contract and the instruments for its execution (accounts in cryptocurrency, etc.);
- fulfillment conditions laid down in the algorithm during programming. They are confirmed by the EDS of the participants and the blockchain itself.
The work of smart contracts can be schematically described by the following steps:
- cryptocurrency or other asset is transferred to the program;
- the program monitors the execution of the contract in accordance with the terms of such;
- when the conditions are met, the transfer of assets takes place between the parties, the seller receives money, the buyer receives the purchased goods.
Figure 3. Block diagram of smart contracts on the example of a house sale transaction.
History of appearance
Despite the relative youth of cryptocurrencies, the idea of smart contracts appeared a long time ago. Back in 1996-97, Nick Szabo proposed this idea, describing the contract as a software protocol that conducts transactions based on mathematical algorithms and conditions embedded in it, fully controlling their implementation. This should have significantly improved the quality, speed and reliability of e-commerce transactions.
In practice, the idea could only be realized with the advent of blockchain technology. So, the classical chain already contained some prerequisites for the use of "smart transactions", but the BTC blockchain was not completely suitable for this due to a fundamental flaw in the principles of work: it, like many similar projects, does not have Turing completeness, and contracts in these systems are structurally quite simple, providing limited capabilities (deferred execution of transactions, multisignature).
The idea was fully implemented only in 2013 on the ether platform. Its creator, Vitalik Buterin, having analyzed the current situation in the cryptocurrency market, found that the largest project at that time (bitcoin) was poorly suited for the implementation of smart contracts due to the limited capabilities of the protocol. Therefore, he decided to create his own protocol, optimized for working with smart agreements.
Types of smart contracts
"Smart agreements" are divided into several types according to the level of automation:
- fully automatic;
- having a copy on paper;
- partially paper-based, when part of the terms and conditions is on paper, and the other is implemented in software (for example, payments are automated).
Today, smart agreements are at an early stage of development, so there is no need to talk about full automation. While developers are finalizing and optimizing their solutions, smart contracts automate only some forms of agreements - for example, the transfer of property rights in exchange for banknotes. Already now, in this way, it is possible to acquire not only digital assets, but also movable and immovable property, up to housing and vehicles.
Scope of smart contracts
Smart contracts help optimize various processes (including in business) and carry out monetization (for example, charging a commission for working with a contract). Agreements can be applied:
- in holding elections and voting;
- in the insurance sector;
- for the purposes and tasks of trade;
- in gambling and other areas where funds and assets are transferred between users.
Contracts have already found their way into cryptocurrency exchange trading, and institutions dealing with fiat currencies are also looking closely at the technology. The fact is that smart agreements are reliable: if counterparties do not trust each other, on the terms of the agreement, they freeze a certain amount in the blockchain platform, spending and other operations with which will be available only when the terms of the contract are fulfilled.
An important advantage of contracts is the absence of intermediaries: all operations are carried out according to the rules programmed in the agreement, and the blockchain ensures data integrity, transparency of operations and the impossibility of third-party intervention.
Another important area of application of agreements is holding.
Smart contracts and initial coin offering
ICO and smart contracts have become an inseparable concept today. When a cryptocurrency issuer / author of a project conducts an initial coin offering, he programs the condition under which crowdsale participants purchase digital tokens. For example, agreements may imply that funds will be returned to buyers if the ICO goal is not achieved, or that participants will receive a certain bonus in tokens over time.
Multisignature technology, if incorporated into the contract, guarantees and confirms the integrity of the project and its authors.
Advantages of smart contracts, their disadvantages and prospects
Table 1. Pros and cons of smart contracts
| Advantages | Negative traits |
|
|
As you can see, the disadvantages of smart contracts are directly related to the youth of the technology and flaws in the code and related tools. Over time, most likely, these problems will be eliminated, thanks to which the objective obstacles to integrating smart agreements into everyday life that exist today will also disappear.
Despite the interest in contracts from the banking sector, trade, financial markets, they are far from always ready to switch to them, since the exchange of confidential data takes place through a secure, but still a public distributed ledger, which may be unacceptable. In addition, there are certain problems with the speed of data processing and scaling of smart systems, on which developers are working intensively.
But these disadvantages are already to a certain extent leveled out by indisputable advantages. Let's consider them in more detail.
- Autonomy.
As already mentioned, the parties do not need to resort to intermediary services of brokers, notaries and others to conclude a deal and confirm it.
- Reliability.
The contract is contained in the blockchain, duplicated many times in the registry and encrypted with cryptoalgorithms.
- Safety.
All transactions on the blockchain (and therefore the data in the smart contract) are encrypted with mathematical algorithms that minimize the chances of data forgery, theft or destruction.
- Accuracy.
Since contracts are automated and require a minimum of manual intervention, the likelihood of errors inherent in manual transactions is also reduced.
Interesting: today, technology experts increasingly associate blockchain solutions with artificial intelligence: according to many, the synthesis of these two areas of research can eliminate most of the problems and make smart contracts suitable for widespread use.
Experts agree that smart agreements will eventually be widely applied to:
- financial market;
- in trade;
- for accounting;
- in logistics;
- in transport;
- in digital authentication systems and many other areas.
Video explaining the basics of smart contracts:
What are smart contracts, how they work and why the future belongs to them.
Blockchain is a decentralized system that exists thanks to many networked computers. Therefore, one of its main advantages is that you can avoid paying intermediaries and save your time and nerves.
It says that the creator of the contract must receive 10 thousand bitcoins. This contract allows anyone with sufficient funds in the account to transfer bitcoins to other people.
Practical application of smart contracts
Using smart contracts, you can simplify work in many areas of life, including logistics, management, law, and even elections.Elections
According to experts, it is almost impossible to falsify the election results, however, thanks to smart contracts, it is possible to completely exclude the possibility of external interference in the voting system.
In this case, the voter votes will be placed on a distributed ledger and will require exceptional computational power to decode them. Such computers do not exist, so it will be impossible to hack into this system.
Management
Blockchain not only offers a reliable and transparent shared ledger, but also helps to avoid misunderstandings when working together or situations where the parties draw up contracts independently.
Logistics and supply
Bitcoin Core protocol developer Jeff Garzik says:
“UPS can execute contracts that say,“ If we get paid to ship a product, then the manufacturer, who is many links up the supply chain, will immediately start creating a new such product, since this one has already been delivered to its destination. ”
Procurement too often suffers from bureaucracy, when different forms must be approved in multiple instances. Because of this, fraudsters get the opportunity to make money, and companies incur losses. Blockchain avoids these problems, as each participant in the supply chain gains access to a secure electronic system that monitors work execution and payments.
For example, Barclays Corporate Bank uses smart contracts to register the transfer of ownership and automatically transfer payments to other financial institutions.
Cars
Think about a future where everything will be automated. Google is already building it, making smart phones, smart glasses and even smart cars. And this is where smart contracts come to the rescue.
Take self-driving or self-parking vehicles, for example. Smart contracts will determine who is responsible for the accident: the sensor or the driver, and will also help in resolving any other situations. With smart contracts, insurance companies can set premiums based on where and under what conditions drivers drive vehicles.
Other areas
Other industries such as acquiring, lending and accounting will also use smart contracts - for example, for risk assessment and real-time auditing. Lawyers will be able to move from drafting traditional contracts to creating standard samples of smart contracts. And on the Blockchain Technologies website, smart contracts have turned into an electronic-paper hybrid: they are confirmed by the blockchain and receive material embodiment in the form of a paper copy.
Patrick Hubbard, Chief Product Officer and Senior Product Marketing Manager at SolarWinds:
“The Yangon Stock Exchange in Myanmar makes payments through a distributed ledger. Of particular interest are those blockchain functions that go beyond the traditional use of the technology. So at the Yangon Stock Exchange it was possible to solve the problem of settlements made at different times in the trading system, which synchronizes trades only twice a day. Due to the fact that smart contracts themselves ensure the execution of transactions, blockchains with their reliable transaction system can be used in situations where complex operations are required, depending on various changing factors. This is why Amazon, Microsoft Azure and IBM Bluemix are focusing so much on developing blockchain as a service cloud technology. "
Cons of smart contracts
Smart contracts are far from perfect. What if there are errors in the code? How should the government regulate these contracts? And how will it levy taxes on such transactions?The list of possible problems is not limited to this. Experts are trying to solve all the issues, but such difficulties alienate many potential users.
Blockchains where smart contracts can be concluded
Bitcoin: An excellent blockchain for transactions with bitcoins, but the possibilities for working with documents are limited there.Side Chains: Another name for blockchains, parallel to Bitcoin, which provide somewhat more opportunities for working with contracts.
NXT: It is an open blockchain platform with a limited number of smart contract samples. You can only use what is there; you can't write your own code.
Ethereum: An open blockchain platform that is best suited for writing and working with smart contracts. You can create any program, however, you will have to pay for the computing resources of the platform with ETH coins.
Such a phenomenon as smart contracts, has become popular along with the proliferation of cryptocurrencies. However, for the majority, the definition of smart contracts still remains unclear. Further, you will find out in all the details what it really is, the principle of operation and the scope of application of this phenomenon.
What is a "smart" contract
Society has long realized the need for the emergence of S-K, which can be translated as "smart" contracts. The first developments in this direction were made back in 1994 by the programmer Nick Szabo. However, the technology received its practical implementation only in 2008 with the advent of the blockchain and bitcoin cryptocurrency. The software add-on for concluding smart contracts based on bitcoin was never implemented, although the need and potential for development in this area was obvious.
So, in 2013, Vitaly Buterin, a programmer and founder of the Bitcoin Magazine, developed a blockchain project. It is a complete platform for easily launching blockchain applications using smart contracts. It was in it that "smart" contracts were first implemented as it was originally intended.
In simple words, what a smart contract is, it is better to put it this way - it is a deal, the terms of which cannot be violated in any way. In practice, two people conclude a deal with each other, prescribe its conditions and fix a certain amount of money. When all the pre-defined conditions are met, the contractor automatically receives the transaction amount to his account. If at least one of the conditions is violated, then no payment will be made. All this is implemented on blockchain technology, where it is impossible to cancel transactions or somehow falsify or change the data already entered.
How a smart contract works
In essence, cc are computer algorithms that are developed on the basis of computerized logic and have the form of a program code. At the same time, a smart contract is inherently linked to the blockchain, which can be considered the environment of its "existence". That is, this computer algorithm must be recorded somewhere, and for this, a chain of blocks (blockchain) is used.
The composition of the "smart" contract:
- Clearly indicated conditions, upon the fulfillment of which it will be fulfilled.
- Electronic signatures of each of the parties to the transaction.
- Access to the object of the contract is the services or specific goods that are specified in the contract.
Smart contracts perform the following functions:
- Tracking whether the conditions specified in the transaction are met.
- Making a decision as to whether the conditions are met within the specified time frame, if any.
When the terms of the contract are fulfilled, the assets are distributed as indicated in the terms of the transaction. If the conditions are not met, then a penalty or penalty will be imposed. To open such transactions in the Ethereum system, the platform's internal currency is used.
Benefits and Features
- Lack of numerous intermediaries, cost reduction.
- Security, no risk of fraud, invariability of conditions.
- Automation of transactions, high speed of execution of decisions.
- Saving time and money.
- Accuracy of fulfillment of conditions.
- Transparency, where all interested participants can freely observe the development of events while maintaining confidential data.
- The inability to change or correct anything after the conclusion of the contract.
Where are smart contracts used today?
The promise and scope of smart contract technology is enormous, from fair presidential election results to storing your documents. For example, if there is a record in the blockchain that a particular apartment belongs to you with the appropriate documentation, then no "black" notaries or racketeers will be able to take away your property or forge documents.
Today most of all smart contracts are used in the environment of the Ethereum platform during ICO - the creation of new blockchain startups,. Ethereum-based ICO organizers are raising funds for their project. In this case, the transaction is carried out under a smart contract. Users are guaranteed to receive their coins (a share in the project), and developers - money for subsequent development without any possibility of deception.
If we talk about the prospects for the future, then s-k can be massively used in the following areas:
- The entire financial sector.
- Field of jurisprudence.
- Various stages of voting and elections.
- Logistics industry.
- Mobile devices, gadgets, transport.
- Documentation and identification of the person.
- Registration of property rights, etc.
As a conclusion about what smart contracts are, it is worth noting that blockchain technologies are only at the initial stage of their development, and thousands of developers around the world are working on the further development and implementation of the digital industry in real life. It can be assumed that soon "smart" contracts will successfully replace traditional electronic contracts.
