Popular Smart Contracts Overview
Smart contracts are set to revolutionize business and the world as we know it, all within the next couple of years. These are essentially a piece of computer code that runs on the Ethereum platform and executes the terms of contracts automatically.
by Alex Smirnov, Phenom
The Ethereum website describes them as: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference.
They have resulted in the creation of a number of exciting blockchain-based projects, including DAOs (Decentralized Autonomous Organizations), ERC-20 tokens and decentralized exchanges.
Below, we review some of the most exciting projects based on smart contract technology.
You can think of ERC-20 tokens as another cryptocurrency with additional properties. ERC-20 tokens could be utilized by DApps, for example as an inner currency or as sort of company’s shares. The ERC-20 token has six functions, which allows users and other smart contracts to interact with the token.
ICOs are essentially a crowdsale of digital tokens that can be exchanged for cryptocurrencies — and arguably the investment trend of 2017 and 2018. Some $5.6 billion was invested in ICOs in 2017, and this total was exceeded in the first four months of 2018.
Once the crowdsale is completed, smart contract technology is used to distribute the tokens to everyone based on the amount of Ether they invest in an ICO. A token exchange rate and other essential information are updated during this process, allowing the ICO to be carried out with a small number of maintainers and the required decentralization. Ethereum itself was born from an ICO that raised $18m out of Bitcoin.
Other examples of successful ICOs are:
- NEO ($0.03 ICO token price, all-time high price $88.20),
- Spectrecoin ($0.001 ICO token price, all-time high price $0.64)
- Stratis ($0.01 per token ICO token price, all-time high price $5.60).
EtherDelta is a decentralized cryptocurrency exchange, where most of the actions are implemented via the use of smart contract technology stored in the blockchain. The smart contract has a convenient user web interface, in which even the biggest technophobe can complete their transactions.
When you create an order, EtherDelta creates a record in their off-chain order storage. The order storage is just a list of cryptographically signed orders. Although orders are stored off-chain in order for a user not to pay the fee each time one wants to submit an order, furthermore EtherDelta has a fullback mechanism which allows to store orders on-chain..
When your counterparty decides to fulfill your order, one sends a transaction to the smart contract, which validates your signature and that you and your counterparty have sufficient balances to close the deal. After that, the smart contract automatically performs the asset transfer.
Crypto Kitties was such a popular game that it overwhelmed the Ethereum network in November 2017. Some $3 million worth of kitties were bought in the first week of the game.
In the game, you collect digital assets, which represent the kitties. These digital assets are unique and behave as collectibles. As such, each ‘kitty’ has a completely unique set of properties.
These collectible kitties come in generations. Kitties are able to sire (become a parent), and each kitty can serve as a matron or sire for a newborn kitten. New kitten’s genes are a combination of one’s parents’ genes. Each new generation arrives every 15 minutes. The newborn kitten will belong to matron’s owner. Creators of the smart contract take a 3.75% fee for every deal made with kitties, plus the starting price of first-generation kitties.
This is just the beginning for smart contracts…
The most exciting thing about smart contracts is that no-one knows the limit of what can be created. Smart contracts have been tipped to completely take over insurance claims. There are some start-ups working on a solution that will allow musicians to make it big without record labels. Others are attempting to make it possible to securely vote for a political leaders through the blockchain, putting an end to election fraud forever.
Wherever the ceiling is for this technology, it looks like there are a few years of exciting technology developments ahead of us.
Author Name and Bio: Alex Phenom is a blockchain enthusiast and founder of Phenom.Team — the fast-growing technology company with more than 20 members on board. At Phenom, Alex leads the research and development in the area of blockchain technology. Under his guidance Phenom.Team became a winner of two hackathons, developed more than 10 blockchain solutions and DAPPs and helped projects accomplish more than 10 ICOs with more than $50mln funds raised.