Smart Contracts on Blockchain- Defining trust in a new digital era

Smart Contracts on Blockchain- Defining trust in a new digital era

Smart Contracts are computer programs that can be executed on a decentralized network of computers. A decentralized network means that many computers in a network work together to complete program function executions. Instead of using your own computer to get computations completed, you use crypto currencies to power other computers on the network to get things done. We are just beginning to discover use cases for this, which range from better storing encrypted data online and doing financial transactions.

The Ethereum network is currently the largest platform for creating and deploying Smart Contracts. A smart contract in Ethereum is programmed and added at a certain address on the Ethereum network. This means that the code for that contract can be public, as it is stored on the public blockchain. Blockchain refers to a digital ledger which stores a record of public transactions in blocks, such as Ethereum or other similar crypto technologies. The code is transparent and cuts out the middle man in many use cases, making it lucrative for organizations and business.

Some great use cases include insurance companies, IOT (internet of things) and copyrighted content, as seen in this great post. Another great use is decentralized voting, which entirely eliminates government corruption in voting in the simple execution of a smart contract program. One organization making big strides in this is Democracy.Earth. Smart Contracts written in the Solidity programming language are generally wrapped in a Website presentation and are referred to as "Dapps" (Decentralized Apps). With a Dapp you can essentially become your own bank. There are many Dapps that exist today at State of the Dapps for all different things such as e-sports, gambling, lottery, voting, and the list goes on.

Looking to crowdfund or offer a coin to your business' customers? ERC20 Tokens are smart contract tokens existing on Ethereum which can be viewed as their own currencies within the crypto network. Companies such as OmiseGo and TenX have raised huge sums of crypto currency by selling their own tokens built on the network. If the token surrounds a business model with a revenue stream, odds are that your ERC20 tokens can increase in value based on the market. Taking a company "public" in the crypto world can be compared to a company's initial public offering in the stock market- but instead it is called an Initial Coin Offering (ICO).

Why are Smart Contracts Trustworthy?

Everyday, we put our trust in the governments we vote for and the banks that store our money. We trust in insurance companies to take care of us if something goes wrong. The problem with these systems today is that they are directly in the control of political and organizational leaders, who are human just like us. This opens the door to corruption and foul play in these industries, as they can be manipulated from within. A smart contract on the other hand, is transparent and public, the very nature of it is that it cannot be manipulated. Once a smart contract has been engaged to complete a transaction, it will complete exactly how it was coded to and no parties can interfere or change the result of it once it has been executed. This means we can trust Smart Contracts even when we cannot trust our fellow citizens.

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Ryan received his Full Stack Web Development certificate from Northwestern University in 2018. He has a general knowledge both front-end and back-end development and specializes in JS frameworks.


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