- May 9, 2019
- Posted by: suma
- Category: Blockchain
Now the day has come that technology offers digital currencies and contracts without the need for banks or other intermediaries. Blockchain technology is transforming our interaction with this ever-evolving digital world.
The smart contract is playing a vital role in this digital world. Cryptocurrencies are using Smart contract to improve contract agreement efficiencies.
Features of Smart Contracts:
Smart contracts are computerized contracts and are decentralized. Or in another way, we can say that Smart contract is a promise made by two parties in the form of a digital contract, completely cutting out the middle man. It is a technology that allows you to trust in a contract that a third-party.
Let’s take an example of a vending machine of the cold drinks. when you put your crisp dollar bill into the machine, and out pops a soda. If your dollar spits back out at you, you get no soda. Once you hold up your end of the deal with a dollar, the machine then holds up their end of the deal and gives you a soda. This is, essentially, how a smart contract works.
why you don’t need the third party to initiate the agreement?
As the contract itself is a computer protocol that can be verified, signed and deployed to a blockchain. It can be an established person to person and enforced automatically.
The two most fascinating characters of Smart contract i.e, They are immutable and distributed make them worthwhile. The reason is that they are on the blockchain and the code is nearly impossible to tamper with. As once the smart contract is created it cannot be changed.
Georgetown Law Technology Review found smart contracts to be innovative legal agreements. It is a self-help approach that can outline a legal contract between two parties. The day will come when a smart contract will be used in courts alongside traditional legal agreements.
As smart contracts provide the highest level of safety which led to reduce the incidence of fraud or manipulation.
Now what we are getting in a digital world is more transparency and data safety. Smart contracts are time-saving, cost-reducing, and represent ingenious digital solutions for transactions. Though they may not replace lawyers yet, they can start eating away at their market-share already.