The blockchain technology will has made great inroads in shaping the way we do things and offers us users solutions to myriad of problems that plague many centralized systems in different niches of business and industry. This is a highly versatile technology whose greatest attribute is in the fact that it empowers its users and gives greater accountability that is lacking in present systems.
The genius of this technology cannot be overstated as it continues to expand, and one of its star attractions so far has been what is known as Smart Contracts which the Ethereum blockchain pioneered and which is now being adopted by many other blockchains. So what is it all about?
What is a Smart Contract?
A Smart Contract can be easily defined as a set of simple instructions that one attaches to a cryptocurrency payment which makes the finalization of such a payment subject to the fulfilling of the attached conditions. A Smart Contract consists of a few lines of codes which are attached to any given crypto payment, as agreed by the sender and the recipient, stating the amount involved, when it is due, and the conditions that will trigger the finalization or reversal of the payment. A Smart Contract can be easily described as a conditional payment mechanism whose purpose is to protect both buyer and seller in the process of a transaction and enable business even when there is no trust between transacting parties.
Features of a Smart Contract
What makes a Smart Contract an awesome innovation and one that is the greatest thing to happen to the industry since the creation of Bitcoin are many, some of which include:
One of the star attractions of a Smart Contract is that much like the blockchain technology that powers it, is that it is completely tamper-proof and no once set in motion. A typical Smart Contract is agreed upon by the transacting parties with the understanding that both parties agree to the stated terms in it, and once put into play, neither the payer nor the payee can alter its conditions to suit them in anyway. A Smart Contract is completely secure which makes it a trusted arbiter that enables business where trust issues would have previously made it practically impossible to conduct.
Another key feature of a Smart Contract is that given that all conditions set within it are agreed by the transacting parties beforehand, at the end of the given transaction, and depending on whether the recipient fulfills their own end of the bargain or not, the Smart Contract does not require the action of either to automatically execute itself. Unlike when we have lawyers draft up agreements, we still need them to interpret who is in the right, and what belongs to whom, this is not a requirement in a Smart Contract, as it uses what is very powerful A I Oracle on the Ethereum blockchain to execute itself in favor of either of the transacting parties.
Easy to Use:
A typical Smart Contract does not require any coding expertise in order to be created or executed. It is only a few lines of legible language which the paying party inserts into the payment instructions. It can be written by even the least experienced cryptocurrency user, which is why it is touted to be the technology that will eventually replace lawyers in business.