There have been many proposals that have come up since the blockchain has emerged as a whole new industry. The blockchain that is available for public access has come up with an advanced technology known as smart contracts which have created some confusion in understanding among the people. On one hand, as we all know the general contracts are written in a way that it mentions the terms and conditions with the relationship that is a law enforced one whereas on the other hand the smart contract’s relationship is enforced with the code that is cryptographic one. Programs that are executed by smart contracts will perform accurately what it has been asked to do by its designer.
It was first adapted in the year 1993 by a tech scientist Nick Szabo who was also a cryptographer who was the real describer of this idea. He said that it will be like a vending machine that is digital. He also gives an example that became very famous which describes how when the data is inputted in by the user and getting an output from the machine. Another example we can take is if you want to execute a specific command, start by creating a contract that will squeeze the data through the contract created. The people who use ethereum as a platform will be able to send 5 ethers to anyone they desire through the data with the help of smart contracts. Read more
Working of Smart Contracts
The primary smart contract was initially supported by Bitcoin which suggested that the value can be transferred from one person to another person within the network. When some specific conditions are encountered the work that a node will do within the network is a validation of the data. One drawback that Bitcoin had was the smart contract was applicable only on currencies.
This is when the ethereum came to the rescue by replacing understandable language into a language that the developers used to write the program of their own. Developers use ethereum which lets them program and create a smart contract of their wish. Ethereum is providing a language that will be supporting a wide range of instruction used for computation.
- A function known as multiple signatures can be implemented on an account which means that if a transaction has to be carried out multiple people’s approval is required.
- Insurance agreements can also be managed when one user purchases from the other.