Definition of Smart Contract
Today we will talk about smart contracts, one of the important things in blockchain technology! What is smart contract?
Smart Contract is an agreement between two people in the form of computer code, in this case the vexanium smart contract is written using the C ++ programming language while the front end can be combined using other programming languages such as PHP or Python. Smart contracts run on blockchain networks, so they are stored in a public database and cannot be changed. Transactions that occur in smart contracts are processed by blockchain, which means smart contracts can be sent automatically without a third party (bank, government, broker, etc.).
Transactions that occur in smart contracts only occur when the conditions in the agreement are fulfilled. In the absence of a third party, there is no entity that needs to be trusted in carrying out the smart contract and of course this can reduce costs for third party services. The smart contract code is responsible for facilitating, verifying, and enforcing the negotiation or performance of a transaction or agreement.
How Does Smart Contract Work?
We will explain how smart contracts work through a case example:
Andy wants to buy Kevin’s house for Rp1,000,000,000, then the purchase agreement is made using a smart contract. So the smart contract contains an agreement between Andy and Kevin, which can only occur after fulfilling an agreement made by the two parties.
In order for Kevin to get Rp1,000,000,000, he must give the house certificate to Andy. After Andy received the certificate, Kevin only received Rp. 1,000,000,000, in accordance with the smart contract that had been made and agreed upon together.
If in this scenario Kevin and Andy don’t use smart contracts, then they have to pay a lot of fees to third-party companies. Amazing, right? There is no commission anymore and there is no delay in waiting for lawyers and brokers to process agreements. This is only one of many usecase or smart contract implementation that can be used to solve everyday human problems.
Use of Smart Contract in solving human problems?
Smart Contract has unlimited usage possibilities. Smart contracts are currently being used for financial trading, insurance services, credit authorization, legal proceedings and even for fund raising / crowdfunding.
Let’s look at smart contracts that can be implemented in any industry in the following infographic. for detailed explanation can be checked here.
Smart contract use case