A gentle introduction to Smart Contracts...smart contracts are: ‒ pre-written logic (computer...
Transcript of A gentle introduction to Smart Contracts...smart contracts are: ‒ pre-written logic (computer...
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Smart Contractsby Suzanna Kalendzhian
A gentle introduction to
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1997 Nick SzaboComputer scientist, law scholar and cryptographer
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Start with WhatThe million dollar question is What is the Smart Contract?
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In the context of blockchains and cryptocurrencies, smart contracts are:
‒ pre-written logic (computer code)‒ stored and replicated on a distributed storage platform (eg a blockchain)‒ executed/run by a network of computers (usually the same ones running the blockchain) ‒ and can result in ledger updates (cryptocurrency payments, etc).
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If This Than That
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Simple Example
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What’s good about Smart Contracts
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1 AutonomyYou are the one making the contract; no lawyers or brokers required.
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2 TrustYour documents are encrypted on a shared ledger.
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3 BackupYour documents are duplicated many times on the blockchain.
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4 SavingsSmart contracts save you money since they knock out the presence of an intermediary.
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5 AccuracySmart contracts are not only faster and cheaper but also avoid manual errors while filling out heaps of forms.
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6 SafetyCryptography, the encryption of websites, keeps your documents safe. There is no hacking. In fact, it would take an abnormally smart hacker to crack the code and infiltrate.
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7 SpeedYou would ordinarily have to spend time and paperwork to process documents manually. Smart contracts use software code to automate tasks, thereby shaving hours off a range of business processes.
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Now for Problems
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BagsRegulationTaxationExecution
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Blockchains Where You Can Process Smart Contracts
Bitcoin: Bitcoin is great for processing Bitcoin transactions, but has limited ability for processing documents.
Side Chains: This is another name for blockchains that run adjacent to Bitcoin and offer more scope for processing contracts.
NXT: NXT is a public blockchain platform that contains a limited selection of templates for smart contracts. You have to use what is given; you’re unable to code your own.
Ethereum: Ethereum is a public blockchain platform and the most advanced for coding and processing smart contracts. You can code whatever you wish but would have to pay for computing power with “ETH” tokens.
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22-year-old Vitalik Buterin
Vitalik Buterin is a Russian-Canadian programmer and writer primarily known as a co-founder of Ethereum and as a co-founder of Bitcoin Magazine.