What smart contracts are for
If you’re interested in cryptocurrencies and blockchain you might have heard of smart contracts. Without further ado, let us tell you about what they are.
A smart contract is a digital algorithm or a condition that upon fulfilment allows the parties to exchange money, stocks or other assets. To make a smart contract there must be a decentralized network where all participants have equal rights. Cryptocurrency is used as a financial instrument.
To explain how it works we’ll give you an example.
Have you ever bought real estate? If the answer is yes, you probably know that you need a notary officer to make the transaction, and that means additional charges for the buyer. Smart contracts allow to forego the services of middlemen such as banks, lawyers, notary officers etc. since the contract checks the contractual obligations by itself before verifying it. An asset or a currency is then entered into the program. After that the contract fulfilment is supervised by the program. As soon as the conditions are fulfilled, the parties exchange assets. The seller receives a specific sum of money while the buyer receives the good. In other words, everything is done automatically.
It is Ethereum smart contracts that guarantee the transparency of Casper API operation. Smart contract receives payment from users and pays the data storage service providers fulfil their obligations, which allows us to remove the effects of the so called human element.
