Smart contracts are computer algorithms that automate the fulfilment of agreement terms. They record information about executed contracts in a registry. The algorithms are used in various fields:
- Startup funding;
- logistics;
- commerce;
- business management;
- legal services.
Smart contracts provide automatic implementation of contractual terms and conditions. This ability reduces the number of intermediaries, which reduces costs (financial time). They help in the work of any modern business, among them gambling club lev and others. Smart contracts are used to exchange property rights or digital assets.
The concept of using the algorithm was proposed in 1994 by Nick Szabo. It began to be used with the development of information technology:
- slot machines, the likes of which can now be seen at lev cazino;
- in machines for selling goods, etc.
- Widespread use started with the ICO on Ethereum.
Smart contracts can be independently formed on blockchain platforms:
- Qtum;
- Waves;
- EOS;
- Bitcoin;
- Ethereum;
- Tron.
The platforms have a different:
- Blockchain consensus;
- programming language;
- cost of smart contracts, etc.
The user is determined with a particular platform depending on their needs.
Today, smart contracts are actively used to optimize processes in finance and business. Large companies (Microsoft, IBM) use smart contracts to improve the principles of work, efficiency and transparency of operations.
Smart contracts in practice
Smart contracts in 2023 have great relevance in the following ways:
- Virtual financial asset trading.
- Credit services;
- Banking services;
- Logistics processes: to implement the process of tracking the path of goods;
- Decentralized storage and renewable energy applications.
Smart contracts are in demand in the financial sphere, namely in industries where money and accompanying official papers have moved to electronic format. A vivid example of this is the British bank Barclays. At the moment, its employees are actively using smart contracts on the blockchain to carry out transactions with letters of credit in the supply of cheese and butter of an international nature. The algorithm turns out to be a participant in the confirmation of the fulfilment of conditions:
- Invoice;
- Letter of Credit;
- Certificate of Insurance;
- certificate of origin of goods;
- bill of lading.
Smart contracts help to tokenize real assets by forming digital copies of them. These virtual assets can then be used in trading and transferring ownership.
Smart contracts guarantee the benefits of:
- Security of the computational execution environment;
- Trust in blockchain nodes;
- Eliminate the need for proof of trust between parties (fulfilment of contract terms is enshrined in code and automated).
Due to decentralized storage in the blockchain, smart contracts provide high security.