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Smart Contracts make light work of the high volume of interaction associated with contracts in any business setting.
A Blockchain based protocol, Smart Contracts were designed with an improved way of interacting with contracts in mind.
A Smart Contract is software that obtains all the relevant details of a contract- where intermediaries and middle men don’t come into play. Because of the decentralised system in which time can be saved on delays, Smart Contracts make for very affordable money saving solutions.
Benefits Of An Intermediary-Free Contract
Frequently Asked Questions
A smart contract is a computer program that directly controls the transfer of currencies and assets between parties under set conditions. A smart contract uses information given as input and then assigns a value that is stored on blockchains, which are a public database that is almost unhackable. The key attribute to smart contracts is that there is no third-party involvement thus there are no extra or hidden fees involved with these types of contracts. By eliminating the third party or intermediaries essentially the individuals or parties involved will be saving money and reducing costs that are usually including in administration fees. The technology behind smart contracts is a well-structured system that will execute the transactions the second that the agreements needs are met.
Smart contracts utilise a cryptographic code, originally developed by Nick Szabos in 1994, to control how and when the needs of an agreement are met and released, additionally new development of smart contracts allow for automation of the smart contracts.
Blockchain technology allows for smart contracts to be run on many different computers so that not one singular has control of the contract and can change the conditions. Smart contracts also allow for multi-signature accounts without the need for third party involvement and can automatically enforce obligations of the agreements made.
How do smart contracts work?
Bitcoin was the first development to support smart contracts, thus yes Bitcoin can work with smart contracts. However, it is limited to only cryptocurrency and developers will need to create a separate token and/or contract if they wish to trade assets, stocks or bond instead of cryptocurrency. Ideally this is one of the most secure smart contract platforms because it has a smaller window for hackers to get in as Bitcoin is monitored 24/7 and utilises some of the most extensive blockchain technology.
Smart contracts are becoming more common within the digital world. Smart contracts have most recently been adapted to the US voting system to provide a decentralised ledger system that is powered by high system computers so that it is not hackable. In addition, smart contracts have been developed and used in real estate where rental properties are now exchanged for cryptocurrency and the healthcare industry where personal information can be encoded and stored on a blockchain only to be accessed by the doctor in the presence of the patient. Cryptocurrency is still the most common example of smart contract and blockchain technology but that is rapidly changing as the economy grows.
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