A technical contract or a set of rules declared during the initial period for every function in the digital format. After completing some valuable projects based on smart contracts, Epixel Solutions open up the world of smart contracts for you. Let us make this clearer - it’s a computer protocol enforced in the coding part to satisfy the required conditions. The blockchain platform is used to set all these conditions, and here we're providing with comprehensive guidelines about the smart contract.
The conflicts are avoided within the network using such an efficient idea developed back in 1996 when Nick Szabo came up with such a revolutionized idea! During the initial stages, it was just a basic concept proposed by him. Later on, a well-maintained system is developed and then implemented with the necessary modifications.
How does a Smart contract work?
Let’s narrate about smart contracts with an example, and you’ll get proper knowledge of it.
Suppose you’re going to sell a plot, and you have many expectations about your buyer like,
- You would like to sell the plot (say 2 acres), and you have an expected price in your mind.
- Many buyers approach you and negotiation is always a concern.
- You can’t just bargain everyone one after other and it’s a headache!
- Taxes, land clearance, and other rules come in between as legal norms.
- The purpose of buying might be your concern.
Likewise, many factors arise during this period of time, and you need to go through these each and every time.
If these all things are working or connected through blockchain then, 'smart contract' comes in handy! It can resolve all these complexities easily and make everything simple. With smart contracts, one can easily set the conditions, and if it is satisfied, you're good to go!
You can potentially implement such conditions in a smart contract, and with special conditions, you can make sure of everything. Say like, the right buyer, the right price, the right purpose, etc. Here, you can provide the negotiable range and if it matches the expectation - the plot is sold!
Here are a comparative infographic depicted for your best concern.
Blockchain technology helped to create a great awareness and we’ll give you brief information about it too. Obviously, you know what blockchain is, it’s a distributed ledger system that stores data and is available within the network. It is developed with the complex algorithm and can be made private or public! This technology has created a great impact in the beginning period itself and the smart contract is one of its feature or defining rules for a service/application.
Have you got the basic difference now? Normally, the working structure is too complex and with smart contracts, everything gets an easy touch. Take a look at some advantages of using smart contracts,
Advantages/Benefits of using smart contracts
- Simple and well-organized
- You can add a set of conditions, and every time a new buyer comes in, it'll automatically check these conditions.
- A trust deal is what the world needs and you can easily earn it.
- The contract is open for everyone in the network and you may call it – “transparent network”.
- Timestamp functionality is used to set all the functionalities like negotiation
- A cost-effective approach is maintained here
- Accurate and reliable source of contract etc.
These advantages keep your requirements satisfy easily!
The paper and digital contracts involve a third-person and there is a possibility for a conflict here. This situation is also avoided with the introduction of smart contracts.
The applicability of the smart contracts varies from service to service. This service range from,
- ICO services
- Token sales
- DApp development etc.
In fact, every service where “if else conditions” comes in, follows a smart contract for best results. Let’s explain that part too – for ICO services, the smart contract is used by including various stages of token sales. Well, these stages are provided in the smart contract in a custom manner, and it varies as per the needs and requirements.
Say, like in token sales/ICO event, there may be many stages like private sales, public sales, Airdrop, Pre-sales, Post-sales, etc. And for each of these stages, certain conditions are set using the smart contract. Of all the tokens developed by the organization in the private toke sales, only a 10% may be available for sale. Such limitations can be set using the smart contract. Other factors like how long the event will be available for sales, bonus with certain conditions, etc. The variable function is used to implement the timeframe part.
"If else" condition is applicable here in the smart contract, say like - if the desired sales aren't closed in the right time, you can provide an else condition in the smart contract. It defines what happens next, what is the alternative, will the sales time extend and similar conditions. Complete detail of the project is available within the smart contract and is transparent in nature (public).
Applications of smart contract in real world
Well, we have discussed the applicability in services part but not that in the real world! Let’s see the field of applications,
- Financial institutions
- Insurance sector
- Supply chain management
- Mortar/property sector
- Transportation/shipping segment
An easy flow of business is the result of such an innovative adaptation in the real world. Blockchain technology connects everything together and smart contract plays a vital role.
With the implementation of smart contracts in the real world, there is no need for any third party involvement. A direct set of results can be derived from this service, and this involves global participation - So, the distance never matters here!
Security measures are followed strictly in the blockchain system. Various security layers are used to offer such a sharp shield effect. Hence the information cannot be easily threatened by outside sources.
The world is digitizing and so is the real-life situation. Incorporating these special features into the real-life experiences make things simple and accurate. Smart contract comes in handy and makes blockchain popular to implement.
So, the smart contracts are going to have its impact on the future as well as the present time. Technology is going to push the limits and sooner or later the impact is going to see on the current system.