What is the Smart Contract?

The contracts we mention everyday need to be protected by law and arbitration. But there is one type of contract that is enforced by technology, which we call it as smart contract. Prior to the deployment of the smart contract, the process for all contractual provisions was resolved. So, what is smart contract? What are the advantages of smart contract?

The History of smart contract

In the 1990s, Nick Szabo, a computer scientist working on digital contracts and digital currencies, came up with the concept of ‘smart contract’, proposing to transfer existing smart regulations and related business practices to the internet. Through the internet, people can do business offline. However, underdeveloped technology cannot support the idea. According to the development of blockchain, smart contract technology has been developed rapidly. At present, many research institutes have already regarded smart contract as an important research direction of future internet contract.

What is the smart contract?

In terms of technology, smart contract can be regarded as a computer program that can autonomously perform all or part of the operations related to the contracts and generate relevant verifiable evidence to prove the operations performed under the contracts.

How smart contract works?

Building smart contract: Smart contract is developed by multiple users’ co-participants within the blockchain and can be used for any behavior between any users. The agreement specifies the rights and obligations of both parties to the transaction, and the developer sets these rights and obligations electronically, including conditions that trigger the automatic execution of the contract.

Storage contract: Once the coding is done, the smart contract is uploaded to the blockchain network, where all nodes in the network can receive the contract.

Execution contract: The smart contract periodically checks for related events and trigger conditions, and pushes events that meet the conditions onto the queue to be validated. The authentication nodes on the blockchain first signs the event to ensure its validity. When most authentication nodes reach a consensus on vent, the smart contract will be executed successfully and users will be notified.

Advantages:

(1) Smart contract can be updated in real time and are very efficient. The above article describes that the execution of smart contract does not require the participation of third parties. It can respond to users’ requests at any time, thus ensuring the efficiency of transactions.

(2) Smart contract can be executed accurately. Since the smart contract has all the rules and execution processes before deployment and is performed under the absolute control of the computer, the entire process is unlikely to go wrong. In addition, since the contract is executed under the control of computer, it can save a lot of labor costs.

(3) Smart contract cannot be tampered with. Once the smart contract is deployed, all the contents of the contract cannot be modified. Neither party of the transaction can interfere with the execution of the contract. If one party breaks the contract, it will be punished accordingly.

Based on the definition and advantages of smart contract, it can be executed by the blockchain computing network, and all contracts are automatically executed by all nodes in the network according to the protocol. It can be said that the smart contract endows the blockchain with soul, and can endow relevant applications with vitality based on the complete description of Turing on the basis of blockchain, thus satisfying the higher and broader application scenarios.

Disadvantage:

The DAO attack, for example. Security problems can easily occur because smart contract is designed so that it cannot be fixed online.

In addition, restrictive interfaces are a problem. Block chain consensus involves digital assets of nodes, and each block chain framework of digital assets have different forms of storage. If you want to use smart contract on blockchain, first familiarize yourself with how and where data can be accessed on each platform.

As a subsystem of Trias, MagCarta is a smart contract model that can be programmed across the platform, implementing the flexible scheduling of Prometh applications on the Leviatom network. MagCarta provides incentives and security for computing power, programs, and data contributors by paying Leviatom node and Prometh developers fees and insurance.