Smart being honored, smart contract technology ensures compliance

Smart contracts are seen as a trend-setting technology that could reduce bureaucratic structures. But what are smart contracts about?Crypto currencies are booming, conceived as decentralized means of payment, and have since attracted financially strong investors who are hoping for further gains in price. Since this form of investment is relatively unregulated, there are hardly any short-term risks that this pyramid play is prevented.Smart Contracts with Futuristic Technology The future of blockchain technology, which underlies all cryptocurrencies, can be located elsewhere. For some months, major financial institutions have also shown increasing interest in blockchains. Not because they want to bring their own crypto currencies to market, but because of other blockchain-based technologies – especially smart contracts.In smart contracts, a contractual rule is written down as code that follows a conditional logic, that is, it follows a “if-then” pattern: if certain conditions are met, a specific contract term automatically comes into force. While third parties, such as attorneys, usually guarantee that a contract is being honored, smart contract technology ensures compliance with the contract – so there is no need to interpose an intermediary institution to ensure trust between contractors.EthereumCurrently, the blockchain Ethereum has become the platform for smart contracts. This is primarily because the oldest and largest blockchain Bitcoin is not suitable for use with smart contracts because it was written in a program language that is not Turing-complete.The Blockchain Ethereum serves as a platform for cryptocurrency ethers, while the Blockchain Smart Contracts can be used to create, manage and execute. In Ethereum, Smart Contracts exist as accounts that resemble those of users (user accounts), but are not controlled by a private key, but by the code contained within them.You can communicate with these smart contracts, just like any other account, but the contract itself cannot be changed once it’s created. That makes him on the one hand – as far as he contains no error – immune to hacker attacks from the outside. On the other hand, no error in the code can be subsequently changed. If the contract is flawed, it can lead to major financial losses if a vulnerability is exploited.EthereumCurrently, the blockchain Ethereum has become the platform for smart contracts. This is primarily because the oldest and largest blockchain. Bitcoin is not suitable for use with smart contracts because it was written in a program language that is not Turing-complete.In Ethereum, Smart Contracts exist as accounts that resemble those of users (user accounts), but are not controlled by a private key, but by the code contained within them.You can communicate with these smart contracts, just like any other account, but the contract itself cannot be changed once it’s created. That makes it on the one hand – as far as it contains no errors – immune to hacker attacks from the outside. On the other hand, no error in the code can be subsequently changed. If the contract is flawed, it can lead to major financial losses.Conclusion: Smart Contracts with a little imaginationHowever, smart contracts do not have to be implemented in a blockchain this way. It is also possible to create and verify them as ordinary blocks in a blockchain. The contracts could then be traded like cryptocurrencies, but their content would not be a static monetary value but a particular code that responds to “if-then” events as described above.It is currently not clear which route the development of smart contract technology will take. With a little imagination but can imagine a whole lot of possible applications. Dapps (distributed apps) can be created on the basis of various smart contracts that are linked to each other, ie blockchain-based apps that Ethereum already has.Of course, any form of purchase or lease could be handled through a blockchain and even political elections could be held through blockchains. In theory, this is faster, cheaper, and more efficient, as bureaucratic administrative structures could be saved and third parties that previously provided security for contractors (such as lawyers, banks, or insurance companies) would become redundant. In practice, however, we are still a long way from that.