Blockchain Smart Contracts
Smart contracts Along with blockchain technology
We’ve all heard about the benefits of smart contract technology – a trustless tool to boot out the middleman when exchanging money, assets, or anything of value. As revolutionary as blockchain’s latest buzzword may be, smart contract bugs are causing untold chaos.
Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. They render transactions traceable, transparent, and irreversible.
Smart contracts were first proposed in 1994 by Nick Szabo, an American computer scientist who invented a virtual currency called “Bit Gold” in 1998, fully 10 years before the invention of Bitcoin. In fact, Szabo is often rumoured to be the real Satoshi Nakamoto, the anonymous inventor of Bitcoin, which he has denied.
Szabo defined smart contracts as computerized transaction protocols that execute the terms of a contract. He wanted to extend the functionality of electronic transaction methods, such as POS (point of sale), to the digital realm.
“Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by The Linux Foundation, including leaders in finance, banking, Internet of Things, supply chains, manufacturing, and Technology.”
Certainty of code
Cost effectiveness of repetitive low value transactions
Increased competition by breaking down monopolized financial systems
A truly interconnected world, removing inefficiencies between systems
Decentralization reduces the risk of permanent data loss and corruption
Transparency may assist effective regulation of markets
Faster settlement of trades, and the removal of multiple layers of book entries