A smart contract is an electronic algorithm or a protocol to facilitate, verify, and enforce an agreement between Parties to exchange monetary funds, stocks, and other assets. In order to implement a smart contract, you need a decentralised network wherein all of the Parties to the contract must have equal rights. Smart contracts use cryptocurrency as a financial instrument.
Comprehensive Automation
Quite a lot of activities in the present-day world have been automated in full or in part — such as transactions in the stock exchange and money transfers that are facilitated by software. However, a software may be hacked (modified without proper authorisation) by malicious intruders to siphon your money into their accounts. Every day you use a centralised system, you take a risk, as you can never be sure your software has not been hacked.
A Decentralised Global Computer
A smart contract is also a kind of software — but it is being executed not within a single server but distributed between millions of computers belonging to miners all around the world. If a single miner fails to execute a smart contract in a proper manner, the remaining net members will simply reject such a result — and a miner will not receive a payment for his or her work. Hence the code shall remain intact, unaltered, and correct.
Bottom Line: the Code is the Law.
Smart contracts equip market participants with new payment options. If no If no items from the outside world are used (i.e., from outside the blockchain), there is no need for the parties to ‘trust’ each other, as a properly compiled smart contract is set to carry out all of the operations needed and there is nothing that can stand in its way.
The CiCoin platform provides for facilitation of all financial settlements via smart contracts. All of the payments are absolutely transparent and guaranteed, as the Code is the Law — only a complete outage of the Internet all around the world may preclude the smart contract to be executed as it should.
