The smartcontract on Ethereum blockchain: how does it works?
The big advantage of blockchain technology in AvailCom project is that the system is decentralized and parceled out all aspects, so there is no necessity to pay the agents. That saves time and money. The blockchain is faster, cheaper and safer than the customary systems, that’s why a growing number of people turns to it.
The idea of smartcontracts and their opportunities are to be considered in this article.
In 1994 Nick Sabo, a lawyer and a cryptograph realized that the decentralized ledger can be used for smartcontracts, which are also called the digital contracts.
In this format, the contracts can be reorganized in computer code, stored and replicated in the system and be controlled by a computer network. The first smartcontracts appeared only in 2008, and were based on blockchain realized in bitcoin cryptocurrency. The first practical application for them was found in Ethereum project, whereafter they went viral.
What are smartcontracts?
Smartcontracts help to exchange money, property, stock, anything valuable by a transparent method, avoiding the agent’s service.
The best way to describe a smartcontract is to compare the technology with a slot-machine. Usually you should apply to a lawyer or a notary, pay them and wait until you receive a document or some kind of a resolution. With the help of smartcontracts you just drop the penny (in this case cryptocurrency) in the slot machine (in other words, the ledger), as well as your documents, driving license and anything you need in your account. Moreover, smartcontracts not only regulations and forfeits around the agreement as traditional contracts, but also apply these obligations automatically.
The smartcontract on Etherium blockchain: how does it work, what are its opportunities?
We’ll attain the blockchain technology of Ethereum, because exactly the actual technology will be the bedrock for AvailCom project.
Vitalik Buterin, the founder of Ethereum, explained the principles of a smartcontract:
“Everything transfers in code, the program launches this code, and once it checks the current state automatically and designates automatically: should the asset be transferred to the particular person, should it be regained to the person who sent it, as well as other combinations”.
Meanwhile the decentralized chain stores and duplicates the document, and that gives it definitive safety and permanency.
An example of a smartcontract:
Suppose you rent my flat. You can do it through the blockchain.
You receive the bill that remains deposited in our virtual contract.
I give you the key of a digital record that you receive
If you don’t receive it on time, the blockchain releases the turn-up
If the platform sends you the key before the rent date, the system holds it
The system works on “If-Then” principle and attended by hundreds of people, so you can expect the flawless acting of all obligations.
If you send the certain amount of bitcoins, you receive the key.
The document resets to zero automatically, the code can’t be changed by any of us behind others’ backs, because all the participants are warned all at the same time.
You can use the opportunities of smartcontracts in all situations that vary from the productive financial instruments to the rates of insurance, agreements for the violation of property right, credit-linked guarantee, finance services, legal processes and much more. On AvailCom project there will be a similar pattern on the with the rental contract between you and the owner.
Find out more information about AvailCom by following the link.
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