The age of smart contracts?

In a lot of our documentation is mentioned about smart contract, today we want to deepen about them, what is it?, how does it work?, features, advantages and disadvantages, in general they are used as an integration tool and blockchain feed.

In recent years the usefulness of smart contracts is on the rise and they work in the same way as a traditional contract where the parties, agreements and assertion for legal execution are represented, now! what are these contracts in the blockchain.

What is a smart contract?

The simplest definition in this regard is that they are contracts that have the ability to be automatically enforced once the parties have agreed on the terms. They are developed under computer codes and are deployed and stored on the Blockchain.

How does smart contract work?

Smart contracts have enabled developers to create decentralized applications (DApps).

Smart contracts are a key component of distributed ledgers.

They work through the use of programmed rules embedded in the contract code. When these rules are met, the smart contract executes its code automatically without requiring user intervention or verification from centralized authorities.

smart contracts are executed on a blockchain network and eliminate the need for intermediaries.

Smart contracts provide trust between two parties when transacting online or offline. They help eliminate fraud by providing transparency, making them ideal to be part of e-commerce platforms as well as peer-to-peer payment platforms.

Features:

-Programmable.

-Cannot be modified once executed.

-Self-executing (no human intervention required).

-Stored in the blockchain.

-Auditable.

-Decentralized.

List of blockchain that allow working with smart contracts.

1.-Ethereum: smart contracts are written in a programming language called Solidity and executed by the Ethereum virtual machine.

2.-Solana: for the creation of smart contracts on this blockchain you need Programming in Rust, Solana Toolkit (Solana CLI), Anchor is a framework for developing the Solana smart contract that contains several tools for developers.

3.-Hyperledger: an open source system developed by Linux Foundation that is not a cryptocurrency, but a flexible platform on which smart contracts can be developed.Counterparty: this platform incorporates data into Bitcoin transactions, i.e., it uses the cryptocurrency�s blockchain and allows contracts to be developed on it.

4.-Polkadot: this is an alternative blockchain and is famous for its ability to host parachains, chains within chains, which allow more transactions than usual.

Advantages:

Speed, Efficiency and Accuracy:

Once a condition is met, the contract will be executed immediately. Because smart contracts are digital and automated, there is no need to deal with paper-based processes or waste time reconciling errors that often arise when completing documents manually.

Trust and transparency:

Since no third parties are involved and encrypted transaction records are shared by all participants, there is no need to question whether information has been altered for personal gain.

Security:

Blockchain transaction records are encrypted and therefore very difficult to tamper with. Since each record is linked to previous and subsequent records in a distributed ledger, hackers would have to manipulate the entire chain to change a single record.

Savings:

Smart contracts eliminate the need for middlemen to process transactions, associated delays and fees.

Disadvantages.

Vulnerable if errors in the code are present:

When developing a smart contract, the programmer must be careful and must have done the task with utmost efficiency, since an error or a gap in the logic can generate loss and even worse, generate the distrust that truncates the success of the project.

Stored information cannot be reversed:

Contrary to what happens with traditional contracts that can be rescinded in a court of law, in the case of smart contracts, they work no matter what; by the nature of the blockchain, since its policy is based on the premise that �Code is Law�, there is no possibility of finding a solution in the face of exceptional circumstances that may harm any of the parties that make up these contracts, which raises the question of how governments can regulate this type of contracts and record them.

Little use due to lack of knowledge and distrust:

At the moment, the use of smart contracts only covers the markets of people and sponsors who bet on blockchain technology, so their use is intended for markets of people who are specialists in the field.

How a Smart Contract works?

These are the necessary steps:

-A user initiates a transaction from their blockchain wallet.

-The transaction reaches the distributed database, where the identity is confirmed.The transaction, which can be a transfer of funds, is approved.

-The transaction includes the code that defines what type of transaction should be executed.

-The transactions are added as a block within the blockchain.

-Any change in the state of the contract follows the same process to be updated.

How useful can smart contracts be?

1.-Records: Smart contracts will facilitate the storage and maintenance of records. For example, the millions of confidential patient medical records that need to be stored and updated securely.

2.-Commerce: Most commercial activities depend on approval of their financing, which is a time-consuming and resource-intensive process. Thanks to smart contracts, this time can be drastically reduced.

3.-Supply chains: Internet of Things devices can be used throughout the supply chain to record every step of a product and improve its traceability. In this way, errors, theft and loss can be eliminated.

4.-Mortgages: Mortgage transactions based on smart contracts will be cheaper, faster and more secure. This will allow buyers to access property earlier and update records automatically.

Real estate market

Smart contracts can be used to register property ownership more efficiently. Moreover, their use can extend beyond apartments, buildings or land and register all types of property.

What we have learned is that there are a number of applications and services that employ smart contracts, both in the digital currency space and in other spaces. Whether these smart contracts will see widespread use remains to be seen. After all, blockchain technology is something that is still evolving. But for now, it seems that most people have opted for Ethereum and Solona as the main platforms of choice for deploying smart contracts.

The blockchain provides the foundation for smart contracts, which have the potential to transform the entire economy.