How does a smart contract work? It’s just like your daily life machine! Guess what?
Cryptocurrencies, blockchain, smart contracts have reached the summit of success within a decade as they are strong innovations the world was striving for. Crypto coins, blockchain have gained lots of traction and understand among the people. Smart contracts are still being a mizzle to the tech enthusiasts.
But, if the tech enthusiasts and fintech professionals completely understand the jargon of smart contracts, they are going to bang with this smart contracts to leverage its use cases. Now let’s get into the simple and daily life comparison on how smart contract works!
However, you must get a clear route to get into the process of a smart contract. Here’s a chit-chat to know about what are smart contracts!
What exactly is a smart contract?
A smart contract is a computer protocol that is automated to execute a task on the specified condition. The smart contract is built on blockchain technology. Chaotic, isn’t it?
Blockchain is a distributed ledger technology that records transactions in a cryptographically secure manner. Smart contracts are built on blockchain technology indicates that the entire transaction or deal is distributed across the network by leveraging the features of technology like no third party intervention, tamper-proof, decentralization.
As the smart contracts are crafted on the blockchain network, the transactions are immutable. Now, let’s glimpse at how does a smart contract work!
How does a smart contract work?
Smart contracts are similar to our day-to-day machine. By now, you’d have guessed the machine if you’re witty.
YES! Collars up!
It’s our favorite snacks vending machine! You select your favorite snack that you’re craving for and drop the money in its pocket. All done your snack is at your hands from the channel! Thanks to the developers who have banged our cravings with tech!
This is how smart contracts to work! Let’s take an instance of the transfer of ownership. Smart contracts are self-operating and would be designed in such a way that if the buyer completes the fiat or cryptocurrency transaction to the seller, ownership of the asset would be transferred automatically from the seller. As the smart contracts deployed on the blockchain network is immutable, it’s always a wiser choice to get inspected by the blockchain smart contract development company to ensure the self-executing protocols are flawless before implementation.
Smart contracts are trust-free and irreversible, hence there are no chances of getting disputes in trades, deals, and mortgages in the near future.
You may wonder, why can’t we stick up with traditional paper agreements? Here are the splendid features of smart contracts that must be implemented for this digital era!
Why do we need smart contracts?
In the traditional paper agreements, there are a lot of disputes and chaos happening around the world. Not to mention, almost all the civil lawyers around the world are busy with ownership disputes, deal, mortgage cases.
While smart contracts come into the picture, the entire chaos, as well as the lawyer’s fees, becomes negotiable. Smart contracts can prevent fraudulent sellers and buyers, scams happening in real estate, mortgages and much more. Moreover, smart contracts can make our life easier as they can pave way for the decentralized network of asset ownership that saves our time for finding the reputed and original properties. Just like our centralized, public Encumbrance Certificate(EC) maintained on the government records, smart contracts can show off the trusted owners for the property.
It’s time to switch to smart contracts to build a smarter world!
Sure, you had a clear roadmap to switch over to the smart contracts for your future asset transfers. If you need further queries answered on smart contracts and related technologies, do leave us a line in the comments section!
Let the world become smarter with us!