Blockchain + Smart Contracts = Frictionless Forward Momentum — Stuart
Smart contracts are written in a programming language called Solidity. The Ethereum network also has its own native programming language called Vyper, and they are essentially smart contracts written in Solidity that targets the Ethereum Virtual Machine rather than the EVM.
It is also written in Vyper. It is a strongly typed language with type checking. They are programmed in the form of the Ethereum Virtual Machine (EVM) byte code. Smart contracts can be used to program the Ethereum Virtual Machine. They are basically used to automate the execution of processes such as “if this, do that”. They are carried out on the Ethereum Virtual Machine, and then the state gets updated. They can be linked to other smart contracts to create a contract that can be interacted with. If you were to search the Ethereum blockchain, you would discover that these smart contracts are being utilized for things like cryptocurrency wallets, decentralized exchanges, identity management services, escrow services, advertising services, data management services, supply chain management services, voting services, and so on. Let’s take a look at the benefits of smart contracts.
🌟 Benefits of smart contracts
Smart contracts ensure that all the terms and conditions of the contract are met. This reduces the scope of risk for the parties involved in the contract.
Since there is no third party involved in the contract, the cost to meet the terms and conditions of the contract would be much less.
The entire process of creating and carrying out smart contracts is fast and efficient, thanks to the Ethereum Virtual Machine.
Smart contracts are completely transparent, all the transactions can be viewed by anyone. This is because the blockchain is a public ledger.
🛠️Smart contract developer tools
There are a lot of tools to help developers create smart contracts and decentralized applications. Truffle is one that is commonly used in the Ethereum community because of its functionality and maturity.
Truffle has five main components: drivers, frameworks, testing frameworks, utilities, and Solidity.
- Drivers are libraries that provide the connection between your local computer and the blockchain.
- Frameworks will be used to develop and test smart contracts because it is a collection of testing frameworks and utilities that make development easier. For example, Truffle has a framework that will help you exercise your smart contract on a test network.
- The testing framework is used to test smart contracts and make sure it is working the way you want it to work.
🔮 The future of smart contracts
Smart contracts are all set to revolutionize the way we do business. It will reduce inefficiencies in critical business operations such as insurance, financial services, and many others. It will disrupt many traditional business operations, and it will take years for many industries to catch up with the change. During this time, the number of registered smart contracts has surpassed 1.5 million. It is clear that the Ethereum network is really helping smart contracts become mainstream. Blockchain technology is gaining popularity with each passing day. The smart contracts market is expected to grow by $50 billion by 2024. As time passes, we are going to witness the transformation of many businesses and industries.
🔒 Smart contract immutability
An interesting fact about smart contracts is their immutable nature. This means that once the contract is executed, it cannot be reversed. This is a key feature of a good smart contract to achieve the desired result. For example, once you pay for an apartment, the owner cannot return it back. Think of it this way: smart contracts are “an agreement between parties to do something in the future.” It is an automated and transparent way of enforcing an agreement. It is based on a set of rules and an agreed upon consensus. The rules and conditions are encoded and stored in a blockchain. Smart contracts are an integral part of the Ethereum network, where they have become a cornerstone of the trust infrastructure on that blockchain. Ethereum can be considered a digital currency platform, which also features smart contracts.
Immutability is an attractive feature for blockchains and smart contracts because it prevents the blockchain from being modified. For example, if you’re selling tickets to a concert, you might use a smart contract that sells them for a particular price. This contract is then linked to the blockchain. This means that once someone buys a ticket, they can’t resell it. You can also use the blockchain to automatically release and send funds to the seller once a ticket is sold. This is one of the most well-known side effects of blockchain technology.
🤓 Smart contracts are complex to understand
This is because they are self-executing and there is no human intervention. Human intervention is a key factor in the judicial process. The blockchain technology that is employed for smart contracts brings a feeling of fear of change to parties involved in the process. On the other hand, the fact that smart contracts cannot be changed once they are deployed limits the flexibility of the parties involved.
Blockchain technology is being implemented in many industries and has led to the creation of new apps, and it comes as no surprise that companies want to see their services to be represented in the blockchain. There are many blockchain-based companies that are offering solutions to problems that don’t need to be solved by a blockchain. This is evident in the number of protocols that are being introduced just because the company behind them wanted to be part of the blockchain. Smart contracts pose plenty of challenges, and it is not conclusive that they can be implemented in all industries.
❓Problems and solutions of conventional financial institutions
You are able to gain access to centralized financial instruments, such as lending value, with the use of smart contracts by utilizing smart contracts and a blockchain network. With the use of smart contracts, you can be exposed to low-interest rates and a loan repayment period, which is all written within the self-executing smart contract. It is also possible to gain access to new products and services which are not accessible to you through traditional means. You are also able to draw new users to your platform through new financial services, making your platform a preferred place to be and thus, raising the value of your token.
There are a number of problems with conventional financial institutions, and these include the following;
- High-interest rates: The interest rates are high and this makes it difficult for the users to repay loans and also use the financial services provided in the traditional way. The interest rates are high and this makes it difficult for the users to repay loans and also use the financial services provided in the traditional way.
- Slow approval of loans: The approval of loans takes long in the conventional way as compared to that of the blockchain platform.
- Lack of transparency: The traditional financial institutions are not transparent and this also makes them fall short of the desired trust. The traditional financial institutions are not transparent and this also makes them fall short of the desired trust.
- Complex and expensive: Traditional financial institutions are complex and also costly to use. Impact of blockchain technology on conventional financial institutions
Blockchain technology is set to revolutionize conventional financial institutions by offering the following solutions to the above-listed problems;
- Transparency: The technology is transparent and this makes it easy to access all the information by all parties involved.
- Smart contracts: The contracts are automated and this makes it easy to determine the conditions upon which they are performed.
- No third party: The technology operates in a decentralized way and this means that it is not necessary to involve the third parties.
- No intermediaries: The technology operates without the involvement of intermediaries and this means that it is possible to reduce the cost associated with lending.
- Speed: Blockchain technology is fast as compared to traditional financial institutions.
- No geographical restrictions: The technology offers a wider range of services and this means that there are no geographical limitations.
Centralized financial institutions will most likely start using smart contracts and blockchain technology to provide a cheaper and more reliable service to their users. It is important to understand the importance of this technology, and its impact on how we use our finances. Most likely, the blockchain and smart contracts will be used by everyone and will become an integral part of our financial lives.
❌ Smart contract + blockchain resistance
There is large resistance to the integration of smart contracts in our society by the masses. There is no doubt that blockchain is a disruptive technology. It is also a technology that will take a lot of time to be fully accepted in our society. Blockchain is a technology that is based on a very disruptive ideology. That ideology is decentralization, which is the opposite of how the world is currently run and managed. This makes the blockchain a tool of the people rather than a tool of the government. For this reason, blockchain technology is often associated with the concept of anarcho-capitalism.
Blockchain has become a key part of social and economic life in many countries. However, there is still some resistance towards the blockchain from governments and banks. In fact, most are still very skeptical about the blockchain and the disruption it can cause. This is mainly because of the valid criticism of the blockchain. For example, the blockchain has been criticized for not being secure enough and how it is not scalable enough for our society. However, the blockchain has also been praised for how it can help to solve problems in the country.
What Blockchains can do
However, one thing for sure is that blockchain technology has proven to be very useful. That is why many countries have implemented the blockchain in their social and economic life. The blockchain has proven itself in many ways including:
- Reduce the expenses in the government
- Record keeping in the government
- Delivery of public services to the citizens of the country
- Help to improve government projects
- Help to enforce law and order in an easier and more efficient manner than before.
- Implementation of taxation projects
- Stop tax fraud, drug trade, and corruption
- Manage public funds in a more efficient and transparent manner
- Maintain and protect public services and projects in a better way than before.
🔚 Ending thoughts
What if you could use a smart contract to define taxonomy and a taxonomy system for your particular industry? You’d then be able to write a smart contract that would automatically generate all the tax reporting forms. Moreover, you’d automatically be able to generate the necessary tax report in any country that required one.
What if you could use a smart contract to define the terms and conditions for a specific type of insurance policy? You’d then be able to automatically generate the necessary forms and reports that would be required by any regulator.
There are a lot of areas of life smart contracts can manifest their usefulness through and this is just the beginning! If you read all of this, then I just want to say you’re amazing and I hope your life goes well! Thanks for reading :)
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