Got trust issues? Enforce a Smart Contract.

The tech world is constantly changing and it’s very important to know the things that are going to change the way the world works forever.

Let’s begin with Smart Contracts.

How many times have people broken their promises?

Well, if it’s any consolation, you can stop that from happening again.

Let me introduce you to the concept of Smart Contracts, your future rescuer.

In the Chainlink Spring 2022 Hackathon, Patrick Collins illustratively explained what they are.

Smart Contracts are trust minimized agreements.

Well, let me give you an example.

Imagine you and your friends are betting on different football teams and the winner gets $10 from the others who lost the bet.

Traditionally, you can either trust your friends to be virtuous and verbally agree to the terms or have an agreement written and signed by all the parties involved.

Although the latter option seems reliable, you have to know that words can always be interpreted differently and can result in a conflict of interest.

There are so many incidents (the financial crisis of 2008, insurance companies denying coverages they promised) in the past that we can use as examples to prove that organizations don’t always follow the protocols.

Thanks to Smart Contracts. We do not have to trust these organizations blindly anymore.

If you had two things before you — truth and trust, which one would you believe in? The answer is obvious.

It’s truth over trust.

It’s exactly why Smart Contracts are deployed. They eliminate the need to trust that a party will abide by the agreement because Smart Contracts are immutable (i.e., they cannot be altered) once added to the blockchain.

They are simply codes that get executed when predetermined conditions are met.

To help you understand that better, let’s consider the previous example.

This time you carry out the bet using a smart contract. Say, the wallets of your friends and yours are ready and connected. The moment the winner is declared, $10 from everyone else’s wallet is transferred and there’s no stopping it. Simple, isn’t it?

There’s little to no counterparty risk, high transparency and interest yields.

So, Smart Contracts are simply digital agreements that will change the way the world works after it has been massively adopted across all sectors.

With that being said, I think smart contracts have a lot of use-cases. Can you think of some?

There are so many interesting concepts to explore in this space. What excites you the most? Let me know in the comments below.

If this helped you understand smart contracts, like and spread the word.