You must have come across the word smart contract, if you and oldie, and you know the meaning of smart contract and you will like to share your ideas, I don’t mind learning from you through your comments. As a newbie I will try my best to explain smart contract as simple and broken down as possible.
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We will first of all try to understand what a contract is.
A contract is a written agreement sometimes spoken which most times involves money, employment sales, tenancy that is usually enforced by law. It’s most times a legal binding. It’s always between two or more people. This usually involves a lawyer.
But because of the nature of cryptocurrency trying to cutoff the middle man policy, there had to be a smart contract. So in a blockchain technology, a smart contract is a contract that is self executing when the agreement between the buyer and the seller meets the terms of their agreement. This self executing action is written in lines of code. So it’s basically contracts without lawyers or middlemen but with computer codes usually called protocols that are functional on the blockchain technology.Unlike regular contracts, smart contracts use programming languages like Python,GoLang or Solidity. If you are familiar with computer programming languages you would know the term, IF-WHEN-THEN. So that’s the basics smart contracts work on. For example, IF/WHEN some certain conditions are met when two or more parties want to make a transaction THEN the order will be executed.
Because they run on the blockchain technology, these contracts are usually transparent and can’t be tampered with. They are stored in a decentralized ledger known as blockchain so they can’t be deleted.
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One of the benefits of Blockchain is Transparency.
Blockchain is a great technology for storing financial records or any other data where an audit trail is required because every transaction is tracked and permanently recorded on a public ledger.
But having Smart Contract gives reassurance for Total control over your money.
Thanks for sharing
Nicely said. Thanks a lot for this information.