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Smart Contracts

The origin and history of Smart Contracts are much older than Bitcoin, and dates back to the Smart contracts. Smart Contract was first coined in 1993 by one of the bitcoin’s supposed creators, Nick Szabo. It points out the self-automated computer programs that can carry out the terms of any contract.

Smart Contracts, also known as self-executing contracts, blockchain contracts and digital contracts, are integral part of the blockchain concept. It facilitates, executes and enforces negotiation and performance of an agreement (contract). The complete process is mechanized, it can act as a complement or a substitute for legal contracts whereby the terms of the smart contract are recorded in a computer language as a set of instructions.

In simple term, smart contracts main goal is for you to exchange money, property, shares or anything of value in a clear, conflict-free manner while the services of a middleman are not required. The ideal way to understand its idea is to examine and analyse the technology to a vending machine. You’ll go normally to a lawyer or a notary, pay them and wait till you obtain the document. But with smart contracts, you just drop a bitcoin into the vending machine (ledger) and your agreement, enters your account.In addition, smart contracts not only designate the rules but also penalties over an agreement in the same manner that a traditional contract does, but automatically administer those obligations.

 

Advantages of Smart Contracts

1. Autonomy

It’s you who make the agreement. No need to depend on a broker, lawyer or other intermediaries to confirm. It saves from any manipulation by a third party as automatically as the execution is managed by the network. No bias neither mistake is possible.

 

2. Trust

The documents are coded on a shared ledger. No one can say they lost it.

 

3 Back-up

On the blockchain concept, every single document is duplicated numerous times.

 

4. Safety

There is no hacking with the coding (cryptography) websites that keep your documents secure.

 

5. Speed

Smart contracts enable you to use software code to automate tasks, thus save hours of the business process.

 

6. Savings

It enables to save your money as there’s no need for an intermediary, hence no need to pay a notary to witness your transactions.

 

7. Accuracy

Along with faster and cheaper, smart contracts are precise. There are no errors that can happen from manually filling numerous forms.