A smart contract is meant an agreement that takes place between two people. The agreement takes place in the structure of a computer code. Smart contracts run on a blockchain and so, they get preserved on a public database. The remarkable thing is you cannot change them. The blockchain remains responsible for processing the transactions that do happen in smart contracts. And so, it means they can be sent in the absence of a third party automatically. The transactions happen in smart contracts only when some conditions are met. As there is no presence of a third party there aren’t any issues with trust.
Cardano smart contracts do ensure that there will be the software-ensured digital assurance that no person who is involved will be capable of undermining the contract via bad actions. These contracts do not depend on the actions of companies, governments, and people for execution. In place of that, they depend on self-coded smart contracts for controlling the transfer of funds that take place between the participants of the contract. When the parties become successful in meeting some conditions then a certain result is self-executed because these conditions are coded into contracts digitally.
The results of the contract
The results of smart contracts continue to live on the Cardano blockchain forever. Different participants get engaged in smart contracts on a distributed Cardano network. It ensures that every detail of a contract is recorded digitally and they are reliable and secure. Cardano would turn into a global bookkeeping system for companies and individuals globally, particularly as it is developed for lasting generations and turn into the protocol of choice for various parties that handle large-scale data.
The creation of smart contracts
You can build smart contracts on several blockchain platforms that comprise NEO and Ethereum. As Ethereum is considered the highly prevalent choice for developers, you must know about its smart contracts. A smart contract is being developed utilizing the actual coding language of Ethereum and it is known as Solidity.
How does a smart contract work?
In the year 1994, Nick Szabo proposed smart contracts for the very first time. Szabo was an American computer scientist who was responsible for inventing Bit Gold, a virtual currency in the year 1998. After 10 years of its invention, bitcoin was invented. Szabo is habitually rumored to be the original Satoshi Nakamoto who was the anonymous inventor who invented biotin.
Nick Szabo defined a smart contract as a computer transaction protocol that executes some terms of contracts. He wishes to stretch the functionalities of the electronic transaction processes, like POS or point of sale to the digital world. Szabo in his paper also proposed a contract’s execution for some synthetic assets, like bonds and derivatives.
In comparison to various other projects of a blockchain protocol, Cardano smart contracts are very different in various regards, like the set of a higher assurance code that is present in the highest stages of engineering, use of Haskell in the form of functional language for the protocol’s secure development, and protocol developed formed on peer-reviewed research.