Smart Contract

The smart contract is popularly known as a crypto contract. Under specific conditions, the transfer of digital currencies or assets between parties is controlled by a computer program which is a smart contract. The role of the smart contract is not only defining the penalties and rules around the agreement just like the traditional contract but also automatically enforce those obligations. This is done by taking the details as input, assigning the value to those input via a set of rules out in the contract and execute the actions needed by those contractual clauses. These contracts are saved and stored in a decentralized ledger, blockchain which also underpins bitcoin and other cryptocurrencies. The ideal storage of smart contracts is blockchain (Blockchain Smart Contract) because of the technological immutability and security.

What can Smart Contracts do

  • Manage agreements between users in the network.
  • Provide utility to other contracts like a software library.
  • Store information about an application such as domain registration information.

The belief of smart contract was invented in 1994 by Nick Szabo, a legal scholar, and cryptographer. At that time, there was minor interest or activity which was using smart contracts because the support for the digital platform was very less. But today many businesses are accepting the bitcoin and supporting blockchain technologies which in incoming time will become top digital currencies to trigger payments.