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Smart Contracts – What the Future Holds

If a digital contract is inscribed on a computer system without any human input and is immutable, can it be considered “legal”? This question has yet to be answered, but if blockchain tech becomes widespread enough within 5 to 10 years, this should soon not be something that’s important anymore.

What is a Smart Contract?

A smart contract is one of the most important inventions of our time. A smart contract/programmable contract is automatically executed when certain pre-agreed conditions are met. These contracts can be designed to work with code and involve a lot more security than traditional contracts. 

With the introduction of blockchain technology and cryptocurrencies, concept like smart contracts were born. A smart contract is a “self-executing contractual clause” which regulates its own token, or any other digital tokens on the blockchain.

With the introduction of blockchain technology and cryptocurrencies, concept like smart contracts were born. A smart contract is a “self-executing contractual clause” which regulates its own token, or any other digital tokens on the blockchain. 

Smart Contracts

Pros of using Smart Contracts

Smart contracts are one of the best developments to come out of blockchain. They take what we know now about agreements becoming more and more digital and combine it with blockchain. Smart contracts allow users to enforce a contract through cryptocurrency, so you don’t have to worry about if you were both being honest or not. 

The smart contract would automatically release information on a specific event that happened in their history should conditions be met such as if a payment was sent to the Smart Contract’s address after signing an agreement with the other party. Things like escrow services and lawyers are no longer needed for smart contracts since these can be coded into any form of agreement in cryptocurrency.

Ways to Utilize a Smart Contract

The concept of cryptocurrency being “too volatile” has been a fair debate, as some point out that cryptocurrency is like “just another company stock in terms of correlation to broader markets.” In such a scenario, a smart contract is not just one more “frame” for legal agreement. 

It can address the entire life cycle of an agreement process. Smart contracts are a new way to combat bureaucracy in the real-world with blockchain technology. Utilizing this technology will lessen headaches and overall stress invested in formalities, clearing house costs, double checking sources and records.

Advantages and Disadvantages of using Smart Contracts

Blockchain, a technology which involves encrypted digital ledgers to securely track the exchange of value between parties, has achieved immense popularity in recent years. Smart contracts are digital transactions that don’t require a middleman to facilitate an agreement because instead of a legal contract, agreements take place via computer code which can be written internally or externally. 

Contractors may therefore avoid proprietary middlemen and rely on an external source for enforcement instead of trying to figure out “who holds the purse strings.” Smart contracts also create opportunities for automated payments since when trust is not needed, escrows often can be eliminated from the payment process completely.

Technical features of Ethereum

Smart contracts have been seen from every angle in recent years. From blockchain technology to crowd source intelligence and peer-to-peer marketplaces, Ethereum smart contracts share so much.

Since Ethereum runs on distributed parallel computing platforms, it can operate with higher efficiency than Bitcoin and its predecessors. Like every other cryptocurrency, it also has own blockchain that tracks every single purchase made with Ether tokens.

With this idea, companies could automate the entire lifetime of contracts. This could be done by building in clauses that automatically update the contract as any circumstances change. As a result, they could prevent counterfeiting while retaining the flexibility and creativity without which enterprise would soon cease to exist.

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