What can Smart Contracts do?
By José Pereira, Blockchain Developer at AppCoins
Blockchain is changing the world in so many ways — financial transactions being one of them.
As a decentralised system that exists between different parties, Blockchain allows negotiations to happen with no need for intermediaries. The technical name for that is Smart Contract.
It’s a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. It can help individuals, companies, banks and governments, exchange money, property, shares, or anything of value, in a transparent and conflict-free way, without the need of a middleman.
As I see, the main benefits of using Smart Contracts are:
▶ No need for other intermediaries such as lawyers or brokers to make it work;
▶ The danger of manipulation by a third party is mitigated, since execution is managed automatically by the network;
▶ Documents are encrypted on a shared ledger, meaning they cannot be lost or hacked;
▶ No need to spend an enormous amount of time and paperwork to manually process documents, as software code automates those tasks.
Smart Contracts and the AppCoins Protocol
The AppCoins Protocol uses various Smart Contracts to enforce the execution of its predefined rules. Through them, we are able to ensure transparency and, therefore, bring trust to an ecosystem through several players which wouldn’t have previously had any incentive to trust each other.
One of those Smart Contracts is the AppCoinsIAB, which deals with the In-App-Purchases (IAPs) made within the AppCoins ecosystem.
In order for a user to correctly perform an In-App-Purchase on any app, they must perform a transaction called a buy function.
This function requires several pieces of information as input, which will then be used to confirm the legitimacy of the transaction (valid item within an app, correct amount sent, and so on).
If everything goes smoothly, and indeed it’s a legitimate transaction, the item will be credited to the user. In addition, and most importantly, the transferred amount is then automatically sent to the app’s developer as well as to other stakeholders involved who are also entitled to their share (App Store and OEM).
Those shares are hardcoded on the Smart Contract, thus, every In-App-Purchase, will instantly reward the developer (85%), App Store (10%) and OEM (5%) with the total cost of the item.
This is a key feature and a game-changing concept in the mobile industry as it enables instantaneous payments to all stakeholders. The feature has also put an end to the ecosystem’s mistrust by answering these concerns:
As an OEM how do I know that I’m receiving my fair share of all the In-App-Purchases performed on the devices that I sold ?
How can I track all those In-App-Purchases and cross check the share I received ?
Through the AppCoinsIAB Smart Contract, which is open source and auditable by anyone, you can automatically and instantaneously receive your fair share of all transactions.
Advertisement Smart Contract
Another example, is the Advertisement Smart Contract, which deals with the Proof-Of-Attention flow.
This Smart Contract allows the developer to create campaigns with the aim to reward users for their attention if they try out their app.
Then, a user can perform a Proof-Of-Attention on any campaign, by performing a transaction which will call a registerPoA function.
Analogously to the AppCoinsIAB Smart Contract, this registerPoA function requires several inputs to validate the legitimacy of the user’s attention.
Then, if everything goes smoothly, all 85%, 10%, 5% are hardcoded and enforced on the Proof-Of-Attention flow, rewarding the user, App Store and OEM (Original Equipment Manufacturer) respectively.
Blockchain and Smart Contracts can cause a real change in the way people do business. Our team is striving to keep up with the latest developments and bring the best to our users.
This article was written by José Pereira, Blockchain Developer at AppCoins