All You Should Know About Smart Contracts
By ROKKEX on Altcoin Academy
For a few years now, more and more articles keep popping up with titles trying to predict how smart contracts will revolutionize our lives, change the web, or perfect the business world. Did it already do it? How can a single implementation be so powerful? What kind of a thing even is it? Let’s find out.
What Is a Smart Contract?
It might seem a bit complicated to some, so we will try to explain it as simple as possible. A smart contract is a blockchain code between two (or more) parties that executes a transaction only if pre-defined rules are met. Of course, as smart contracts work as a program, they can not only confirm the rules but execute them too. These contracts allow you to exchange anything of value, including money (fiat and crypto), properties, or shares, etc.
Revolutionizing Power of Smart Contracts
So what makes this set of code so special? Why do people keep expecting major changes, all thanks to smart contracts? It is all because of the main features that smart contracts are proud of:
- Decentralization
A smart contract eliminates the need for a third party involvement, whether it would be a lawyer, notary, central bank, or any other.
- Tamper-proof
As smart contracts require all parties to agree on all the rules in advance, there cannot be any hidden or fraudulent actions taken by any of the sides.
- Simplicity
Smart contracts are self-executing and do not require any control after the implementation.
How Does It Work?
I bet that you have sold something to another persona t some point in your life. It could have been a car, a house, or your old TV. Can you count through how many people or companies did this transaction go through? How much paperwork, planning, or maybe even haggling you had to deal with? There is no need to even mention constant fear of fraud or dealing with choosing beggars as there is a whole subreddit dedicated to that. These situations can be more of a bother than easy money.
And here comes a smart contract revolution. A smart contract would have both the buyer’s money and your property’s possession documents. You and the buyer agree on all the rules and the contract checks if everything checks out, this means your documents are checked if they are not fraudulent and buyers money is verified to be non-fraudulent and the right amount. If everything checks out, the transaction is executed. This way, you avoid spending additional cash and time on any third parties, and you can be sure that your sale will not leave you in the loss.
Smart contracts bring in transparency, but also give equality and power to peer-to-peer transactions. It is easy to see why people expect the revolution when many of us imagine a decentralized and blockchain-powered future. If you would like to know more about this topic, feel free to check our article Meet ROKKEX Team: Blockchain Consultant Lukas Kairys.
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