Code is Law : Smart Contracts
Concept of Smart Contracts was introduced by Nick Szabo in 1997, more than a decade before the first crypto currency, Bitcoin was created. Szabo was an American computer scientist from University of Washington. Simply. What Szabo wanted is to use a distributed ledger to store contracts.
Smart contracts are piece of code which is stored inside a blockchain. It is executed automatically in a deterministic manner. Since it is executed in a blockchain without a middleman, smart contracts are secure and trustless.
We can use smart contracts to storing, sending and receiving funds. They use If then Semantics for it.
By using smart contracts, we can avoid a third party for trusting and also we can avoid human factor from decision making.
What is a smart contract?
According to the Wikipedia defining,
A smart contract is a computer program of a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract.
Smart Contract completely rely on the information embedded to the blockchain and the external data it is intended to use
Smart Contracts are stored on a blockchain!
Since that, they can not be changed after creating it. They are distributed. They carry properties of a blockchain. Because of that, contract is always safe. No one can change it using back doors.
Because of they are distributed, contract is validated by the everyone in the blockchain. Single person can’t force to release the funds.
Uses of Smart Contracts
· Banks: Loans and automatic payments
· Insurance industry
· Postal services.
Ethereum
Ethereum is the most famous and the first blockchain which supports smart contracts.
It is decentralized, opensource blockchain which ETHER ($ETH) is the native cryptocurrency of the platform. It was lead by a Russian programmer Vitalik Buterin. Ethereum was co-founded by Vitalik Buterin and Gavin Wood. Wood latterly left the project and started Polkadot blockchain and Kusama.
Smart contracts can be programmed using special programming language called Solidity which is specially created for Ethereum smart contracts.
