The idea of Smart contracts was first proposed back in 1994 b y Nick Szabo. Smart Contracts are also known as Crypto Contracts. The term contract might be confusing because it doesn’t need to be a legal document. Contract is just an agreement to do something if specific criteria is met.
Smart Contract are self-executing contracts using a If then concept
- If you are a developer this concept is very familiar. If not then you probably don’t know what that means. See what I did there?
- There is a website not related to blockchain called IFTTT. Check it out if you are interested in home automation. It has some really cool stuff and it will get you comfortable with If-Then concepts. This is the core of Smart Contracts
- Many things that you interact with today are already using If/Then concepts
- Pay at pump discounts
- Grocery store discounts
What is different between Smart Contract and just regular If/Then statements?
- Blockchain transparency and immutability
- Code + Currency tied together
Smart Contract Examples
- Rock Paper scissors example I used in a previous episode about dApps
- Toll Roads. If one of your vehicles passes then deduct the amount from your account
- Website ownership transfers. Currently done with escrow or trusting the other person
- Automobile ownership transfer
Why use Smart contracts?
- Bring trust where trust does not exist
- Automation – No Middleman
- Reduce costs, Reduces time, guaranteed outcomes
Where do Smart Contract run?
- Just like you download an app on your phone or computer. The app needs a specific OS. Windows runs windows, iPhone runs IOS, Android, etc
- Smart Contracts are created and built to run on a specific platform. Ethereum is one of the platforms using Solidity as the programming language.
Smart Contract Platforms
- Ethereum is the most popular platform utilizing smart contracts.
- Neo is also known as the Chinese Ethereum
- EOS – Security of Bitcoin and smart contracts of Ethereum
- ChainLink – Brings Oracles (Data from outside sources) to Smart Contracts