What is smart-contracts?

What is smart-contractsCryptocurrency is a very popular digital asset, in which millions of people around the world are investing. Digital coins allow you to earn money both for long-term storage, and for their speculation.

The growth and perspective of cryptocurrency are based on the Blockchain technology. This system of the future and allows you to push the asset data up, increasing its capitalization of investments and popularity.

Even in 2018, the potential of Blockchain technology and its applications in real life are not fully assessed. Everyone thinks only about how to make money with its help. And very few people talk about the prospects for the introduction of this technology in various areas of our lives. For example, only a smaller part of mankind understands the true purpose of smart contracts, and in fact they are able to completely change the direction of doing business and concluding transactions between people. And all big entrepreneurs long ago drew attention to cryptocurrency precisely because of smart contracts.

And every day more and more people understand the importance of it. This raises some questions. Are cryptocurrency and smart contracts so promising and important for the future development of mankind? What is their advantage over the same paper equivalents of all contracts?

This article describes what a smart contract and what the point of it is in simple words. It is shown how it works and how to use the Blockchain system in real life. All this information will help to assess the prospect of growth of the cryptocurrency sphere and the smart contracts technology, enabling a person to think about investing his funds in this wonderful asset of the future.

What are smart contracts? The advantages of this system

First of all, it is worthwhile to explain what the smart contracts of the Blockchain system are.

Usually people, unfamiliar with digital assets, imagine a folder with papers with cases of the company, when they hear smart contracts. And it’s understandable because for all of us doing business means a bunch of paperwork and specialists who control transactions between the companies.

If you refuse this procedure and have unscrupulous business partners, it can lead to irreparable consequences.

A smart contract allows you to exclude the entire difficult process, removing from the transaction all the performers, third parties and paperwork. In simple terms the purpose of smart contracts in the Blockchain system can be described as special algorithms programmed to perform or fail to perform certain actions for each of the parties. (Figure 1)

How smart contract work?

How smart contract workFor example, if two parties concerned to make a deal, they will have to hire performers, fill a bunch of papers, wait for some time to recheck all the data, and, of course, be afraid of deceptions. If they make a deal with the help of smart contracts, there is no need for the third parties and paperwork. The blockchain system and the technology of smart contracts will do everything. It will register companies, automatically fill in all the necessary documentation and automatically make a deal only if all the conditions of each party are fulfilled; all this is fixed in the publicly available Blockchain.

Thus, we can single out the following obvious advantages of the Blockchain system.

Firstly, if some conditions are not met from one of the parties, a treaty does not enter into force. And all money is returned. This completely reduces all risks of fraud and inaccuracies, which are related to the business.

Secondly, after the deal is closed, smart contracts bring all the necessary information into the Blockchain system, which remains unchanged there forever. That is, all important information and conditions cannot be physically removed or changed.

SecondlyAll this gives Blockchain technology an exclusive advantage over the current state of business. That is why smart contracts will develop rapidly in the near future, because they minimize the risks of fraud in making a deal with the minimum costs, efforts and time.

In general smart contracts can give you security, reliability, speed and automation of contracting, as well as impossibility to change or remove anything from the database. This is the future.

A smart contract in everyday’s life

A smart contract in everyday's lifeAs it became clear to everyone, smart contracts will greatly facilitate people making safe and reliable deals. And first of all they will be useful to big businessmen. But how can other people use this technology?

As an example we can take the work of food delivery in any city. In order to arrange delivery, you need to:

  • organize a company that will prepare food;
  • hire couriers, giving them all the necessary equipment and transport.

These two conditions are the basis. Let’s say the entrepreneur could organize everything: hired several couriers, gave them transportation. But the main problem is how to deliver food on time to make the client satisfied. In the small city there are no problems, but what to do in large cities full of traffic?

And most often in big cities to deliver all orders on time (couriers can have several orders in different parts of the city) is impossible. And the person, who orders food, has to wait for 1.5-2 hours or even more. It’s all because of traffic.

And can the Blockchain system be applied here? It can be used to solve this problem of order delivery on time. From the beginning, an entrepreneur can use the Blockchain system and smart contract technology through any specialized application (like hiring on Avito) and hire a person, who posted his resume on this app, for this particular order instead of hiring someone full-time, giving them cars and other equipment, paying fixed salary.

And this application will be actively used by employers and employees. It will enable the employer to select several couriers at once to fulfill all orders, and couriers, having registered in the applications, will get a job without fear of running into scammers. Everything will be fixed by the Blockchain system through a smart contract.

All payments will be made through the smart contracts system the money will be immediately transferred from the entrepreneur’s account to the courier’s account after the successful completion of the delivery.

In short, it is convenient for the businessman and the couriers.

In addition, such application can have a variety of functions: the locations of free couriers, their ratings, past employers’ references, work experience, mode of transport (car, bicycle or even on foot), approximate delivery time, etc.

applicationTo sum up, smart contracts can be applied in every day’s life. This technology will ensure the reliability and security of transactions in all spheres.

Such systems are already being introduced into the modern world; the companies are being created on the basis of smart contracts. There is an example of the foreign delivery service – ZEEW. The main task of the company is to deliver with the help of the Blockchain system. It is possible to pay cryptocurrency and real money for delivery.

At the moment, the company carries out the ICO, raising investors’ funds, and in a short period of time nearly the full amount of investments was made to realize all ideas.

Conclusion

ConclusionSmart contracts are the technology of the future, which will make it possible to secure, simplify and reduce the cost of making a deal. Even this system is still unclear to many people, but its perspectives and necessity for each individual are obvious. This is why more and more funds are invested in cryptocurrency.

Smart contracts will soon be gradually used by all major companies in the world. And now everyone has the opportunity to start investing in digital assets and in the long term to earn a lot of money on Blockchain technology.

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