Developing financial technologies go beyond international banking systems more and more every day. Banks do not hesitate to use new players in this fintech race that has been going on for many years.
At this stage, a new player bir blockchain am appears. The systems and the decentralized infrastructure provided by Blockchain attract a lot of interest in the world of fintech.
One of the most unique features of Blockchain is the decentralized movement quality shared between all parties of the network, thereby eliminating the involvement of agents or third party agents. This feature is extremely important because it saves you the chance of any process conflict and saves you time. Compared to traditional systems, the blockchain offers faster, cheaper and more efficient options, but it has some unresolved issues.
Smart contracts that appear at this stage can be called the most used application of blockchain technology. In fact, smart contracts introduced by Nick Szabo, a key cryptograph in 1994, were the most important elements of the blockchain.
The current world we live in is still generally working on paper-based contracts. In some sectors, even if digital contracts are used, the participation of a third party in the system becomes mandatory. The involvement of third parties may lead to security problems or fraudulent activity with the increase of transaction fees. With the introduction of Blockchain in the field of digital technology, we can effectively solve such issues. Blockchain eliminates the need for any trusted third-party, allowing all entities on the network to interact with each other in a scattered way.
Blockchain technology, known as the first and deepest established crypto money ever established by the introduction of Bitcoin'in attracted attention. In addition to the crypto money applications, there is a lot of demand for blockchain technology and it continues to be developed in this field by turning to different industries. Smart contracts have also become one of the most successful applications of blockchain technology.
The use of smart contracts instead of traditional contracts significantly reduces transaction costs and eliminates many trust issues in the system.
Ethereum is the most popular block chain platform used to create intelligent contracts. Using smart contracts for the first time on its platform sheds light on other blockchain projects.
Intelligent contracts within any type of market have the potential to automate people to run.
So what are these smart contracts?
According to Wikipedia, intelligent contracts are a computer protocol aimed at facilitating, verifying, or executing a contract's negotiation or performance.
Another definition is that intelligent contracts are a set of computer code between two or more parties working on a block chain and comprise a set of rules agreed by the parties concerned.
Intelligent contracts with pre-defined rules are the executive body to produce the output. This piece of code allows decentralized automation by simplifying, validating and applying the conditions of a basic agreement. Smart contracts, money, stocks, properties etc. it allows you to exchange anything valuable in a transparent way, eliminating the need for the tool and keeping the system safe.
For example, we normally require a lawyer or notary to obtain a document registered with the court, and we need to make some payments for these services. However, the scenario can change completely with smart contracts. When you execute this transaction with smart contracts, you pay a small payment without the need for a lawyer or notary, and you receive the document you need, and this event takes place without the participation of any third party.
In addition, intelligent contracts are not only limited to defining rules around any agreement, but are also responsible for automatically implementing these rules and obligations.
Let us now look at how smart contracts can bring benefits to our daily lives:
1- Instant Confirmation
In the case of smart contracts, transactions are executed as soon as the contract conditions are fulfilled. In written contracts, you may potentially take plenty of time to take the contract elsewhere after signing a contract. Smart contracts are currently approved and the transaction takes place. You do not need to go from point a to point b.
2- Reliability and Transparency
The answer to the question of why you should trust a smart contract is actually hidden in the blockchain infrastructure and properties. In other words, no action you make on the blockchain does not change, so it becomes the transaction if you have the smart contract. It cannot be changed later or be attacked by cyber attacks. The system has been safely built in a way that has never been seen before.
Since all intelligent contracts are backed up over hundreds or thousands of times over a large network, the data copied from one block will not be affected or lost. Moreover, these data can be examined by others. This is due to the transparency feature of the blockchainden.
3- Anonymous Structure
Blockchain has a transparent structure as mentioned in the previous article. However, it keeps its users private and everyone is anonymous. Blockchain addresses can be scanned or entered into a corresponding database, you can view the operations. But you don't know who's involved.
In this sea where there are anonymous addresses, we can say that there is an advanced privacy. However, new intelligent contracting technologies use privacy permissions to ensure that only those with appropriate roles or access levels can see it.
As smart contracts continue to enter the respected business world, the security and privacy of smart contracts will be made more standardized and secure.
In your opinion, in which sector and business area will we first see intelligent contracts in our daily lives? Don't forget to drop down.
The article titled 3 Why Smart Contracts Will Change Our Life was prepared by Tuğçe BOZKURT and published on koinbulteni.com.