Smart contracts are selfexecuting contracts that run on blockchain technology from "summary" of Blockchain Technology Explained by Alan T. Norman
Smart contracts are a groundbreaking application of blockchain technology. These contracts are decentralized and automated, eliminating the need for intermediaries and third parties. They are designed to execute themselves automatically when certain pre-defined conditions are met. This feature makes them efficient, transparent, and secure. The concept of smart contracts was first proposed by computer scientist Nick Szabo in the 1990s. However, it was not until the advent of blockchain technology that smart contracts became a reality. Blockchain technology provides the perfect infrastructure for smart contracts to operate, as it ensures immutability, security, and decentralization. When a smart contract is created, it is deployed onto the blockchain network, where it is stored across all nodes in the network. This ensures that the contract is tamper-proof and cannot be altered once it is deployed. The smart contract contains the terms and conditions of the agreement, as well as the logic that dictates how it should execute. Smart contracts are programmed using blockchain-specific programming languages such as Solidity for Ethereum. These languages allow developers to write code that can interact with the blockchain network. Once the smart contract is deployed, it is assigned a unique address on the blockchain, which acts as its identifier. One of the key advantages of smart contracts is their ability to automate complex processes. For example, in a supply chain management system, smart contracts can be used to automatically trigger payments when goods are delivered. This eliminates the need for manual intervention and reduces the risk of errors or fraud.- Smart contracts have the potential to revolutionize the way agreements are made and executed. By leveraging blockchain technology, smart contracts offer a secure, transparent, and efficient way to conduct business transactions. As the technology continues to evolve, we can expect to see even more innovative applications of smart contracts in various industries.
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