Smart Blockchain, Reciprocal services between Blockchain Technology and Smart Contract
By Somayyeh Gholami on ALTCOIN MAGAZINE
This article has been written followed article “Smart Contracts a proper replacement for the miners and block producers”. Now, with the emphasis on the potential of smart contracts, we will examine this great idea from another perspective and will expand upon the subject. The authors of the article are Mr. Mehran Kazeminia and Ms. Somayyeh Gholami. The article is written in Persian and English versions.
The smart contract is a very new concept and utilizing it has only expanded in the last two years. These contracts are just some lines of code that simulate a classic and ordinary contract. A question might arise if the smart contract is just the programming codes, why were not proposed before? And why today a lot of efforts have been made to make the most of smart contracts? What really changed? The fact is simple; basically setting up and using smart contracts with today’s concept is only possible through blockchain technology on a particular type of decentralized networks, and the first network of this type was launched in 2014. In a part of this article, we will look at it, and we will see how the emergence of blockchain technology led to the emergence of smart contracts and their prosperity. Another part of this article is going to develop an idea about reciprocal services between blockchain technology and smart contract in the future. Now it’s the turn of the smart contracts to compensate blockacin technology services! But how could this happen?
In our opinion, future blockchain will not require miners and block producers. A smart contract can perform block producer’s tasks more quickly, accurately and free. This will soon be the most significant service of smart contracts to blockchain technology. We outlined this idea in an earlier article and here we are developing a discussion from another perspective. In addition, ‘Smart blockchain’ might be the most appropriate name for the new blockchain generation. Because considering the potential of smart contracts, these blockchains can definitely develop their services and be smart.
The smart contracts need for blockchain technology
Each smart contract has an account or wallet. Also part of the code of a smart contract is conditions and cases of the exchange between the smart contract wallet with the users’ wallet (or with the wallet of other smart contracts). In this way, a smart contract, like its users, can exchange cryptocurrencies or its special tokens.
Meanwhile, the difference between the functionality of the smart contract and the functionality of its users is that the details and logic of transactions of the smart contract are specified from the very beginning of coding the contract, and when smart contract is registered and deployed into a blockchain, forever, the exchanges will be done only and only in accordance with its initial program. In other words, it is immortal and remains unchanged forever. Furthermore, the original smart contract, and all transactions and exchanges in full details, continuously and permanently are stored and maintained on the blockchain network. If for any reasons, miners and block producers wouldn’t register a new block, this would be an end to Blockchain and all smart contracts of the network, and certainly, they aren’t immortal any more!
Meanwhile, Blockchain technology gives advantage to smart contracts that after registering and deploying of a smart contract, no human (even the owner or developer of smart contract) can make the slightest change in the initial terms of contract, and also no way to change or tamper their transactions. So the biggest advantage of smart contracts is being incorruptible which is created by the advantage of the blockchain technology.
As you see, for registering and deploying a smart contract with today’s concept, it requires a decentralized network and Blockchain technology. The original of smart contract and all its transactions are stored in blocks gradually and continuously. Meanwhile, it is done by spending cost and energy at the moment by miners and block producers, and users of the smart contract will incur these expenses directly or indirectly.
History of the emergence and development of smart contracts
In late 2008, an unknown person published his white paper under his pseudo name, Satoshi Nakamoto which describes the functionality and features of the Bitcoin cryptocurrency. Then the first official Blockchain technology platform, the Bitcoin Blockchain network, was officially launched in 2010. Satoshi Nakamoto announced in 2011 that he will hereafter work on other domain and disappear from the developers’ list.
In 2013, a very young Canadian-Russian genius, called Vitalik Buterin, proposed the Ethereum Blockchain Network in its published white paper, what allowed to register the smart contracts in this Blockchain. Launching the Ethereum network in 2014 let smart contract developers actually start their work. The cryptocurrency of Ethereum is called Ether. Although the network has a lot of ups and downs, its popularity and network development have grown to a great extent. For the first time in 1994, incidentally, in the birth year of Vitalik, smart contracts ideas were presented by computer scientist and cryptographer Nick Szabo. But as previously explained, at that time, basically there was no Blockchain technology to execute this idea.
After Ethereum, different Blackchain networks were launched, each one has unique features, and some have been able to store and deploy smart contracts, but until today, most of the smart contracts are stored on the Ethereum network. The new and serious competitor of Ethereum, the EOS, was launched by Blockone this year. This network brings many features and in fact offers a decentralized operating system.
In EOS, for example, we see increasing scalability, meanwhile, the Delegated Proof of Stake is used in this network, which has led to a dramatic drop in costs and energy consumption for adding new blocks than the Bitcoin miners.
In this section, you’ve found a short history of smart contracts. These contracts are in their development way, and soon in the real world will evolve individual and social aspects. This article will present the specific type of smart contracts who serve just their own blockchain! We call them BPSC. Soon they will be the only block producers that add new blocks to the end of the chain without human factors intervention.
How does BPSC (The block producer smart contract) work and does it have a risk of double spending?
Smart contract developers offer new ideas for smart contracts and DApps every day, and at the same time, there is a lot of effort to upgrade the launched DApps but there has not been an effective action to use smart contracts to record their own transactions up to now, and human factors as block producer are involved, by spending cost and energy, to serve smart contracts! This contradiction, as well as the great potential of smart contracts, get us a great idea of a particular type of smart contract can store and record all network transactions, Blockchain technology, and their own as well.
This idea was reflected in our previous article as a practical suggestion in the form of BPSC. In the previous article, it was said that the BPSC smart contract can operate on a decentralized network in several ways. Meanwhile, only the general characteristics of a BPSC type were examined in a simplified example. In this article, we will expand the discussion of these type of BPSC. Assuming that you’ve studied our previous article, the following explanations could be a supplement to the discussion for conveying the concept of the BPSC.
The main feature of the BPSC is that all transactions are carried out through BPSC, and there is no valid transaction on the network without the BPSC involving. For example, the sender of cryptocurrency can only and only send its cryptocurrency to the wallet of BPSC and then BPSC sends these tokens to the final destination. Meanwhile, the other output of the BPSC is new blocks that include all transaction information which is continuously added by the BPSC itself to the end of the blockchain. There may be a few points here:
1- Is there any risk of double spending in this way? It does not perform like a conventional peer to peer network. Meanwhile, it does not require any other financial or intermediary entity. We will give BPSC the tasks of an intermediary financial institution without paying the costs. That’s why there’s no risk of double spending in this method. Algorithms such as “POW Proof Of Work”, “ DPOS Delegated Proof of Stake”, and …. would not have any performance or function, because the block produced by BPSC is completely valid and requires no consensus and proof.
2- Is there a way to differentiate transactions based on their subject? Yes, even if it is done by increasing the number of BPSCs which is the best approach to reduce the traffic of each BPSC! In addition to separating transactions in different blockchains, it also helps speed of the network. The limitation and important point is that transactions can be assigned to separate BPSCs which their subject are not related. For example, if in a smart contract requires a pay per one hundred Likes, then all transactions on the project must be registered and stored by the same BPSC and into the same Blockchain. Meanwhile, even in these cases, we can allocate odd blocks, to cryptocurrencies’ transactions for example and even blocks, to transactions of the number of Likes. In this case, we have given further details in the previous article.
3-Can BPSC codes be imported into the codes of every smart contract? Yes, in this case, from the very beginning of launching a smart contract, for example, on the Ethereum network or EOS network and parallel to the main network, we will also have a free dedicated blockchain for our project. Meanwhile, creating libraries of codes and standards for BPSC seems to be necessary. These are might the first steps to broaden this approach and smooth using of BPSCs on older and newer blockchain.
4- What is the future of the smart contract Block producer (BPSC)? If the blockchain and decentralized network are supposed to build and launch according to the mentioned approach, BPSC is likely to be involved in registering and storing all transactions since the producing of first block, while after each transaction, it can simply update its internal version of “the balance of wallets of network “, and continue to perform its duties as an impervious and trustee financial institution. In this case, just like any other smart contract, there is concern about the speed of network and security in the BPSCs, but with the difference that BPSCs always have a heavy traffic and their security is essential. For the current active blockchains, the BPSC must receive the last state of all wallets. Of course, as already mentioned, BPSCs can always serve into the exclusive blockchain, in parallel with the main blockchain.
Replacing smart contracts instead of miners and block producer and eliminating all human factors is a great idea and, like any big deal, there are many disagreements, barriers, and even technical problems, but luckily by creativity and innovation, there is always a way.
In this article, as well as in the previous article, we are discussing the current state of blockchain technology and, furthermore, we highlighted the benefits and advancements of this technology, and put forward a great idea to evolve producing of the valid block.
Perhaps today, many people believe that miners, block producer and their activities are considered as an integral part of Blockchain technology, but we hope we can defeat this belief, because this is not true, and the producing of valid blocks, By methods other than existing ones, it is possible and should not forget other possibilities especially the capabilities of smar contracts. Changing the wrong belief is definitely hard, but it’s the first step and probably the most important step in implementing this idea.
Here’s the end of the article. If you are interested in the content and ideas of this article if you believe in decentralized networking and blockchain technology without miners and …. or if you basically think differently about it. Please send us your feedback.
November 22, 2018
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