What is a Smart Contract?

Smart Contracts are self-executing programs running on a blockchain network,  with the terms of the contracts between two parties – such as a seller and buyer – written into lines of code, rather than a formal, legal document. 

Smart Contracts are written in a specific 
object-orientated programming language 
called Solidity.

The goal is to simplify business and trade between both identified and anonymous parties without needing an intermediary. 

They enable developers to build far more sophisticated functionality than simply receiving or sending digital assets. These programs are known as dApps, short for decentralised applications, which, in their essence, are a series of linked Smart Contracts linked to a user interface.. 

Smart Contracts are deployed on blockchain networks to launch decentralised financial protocols and applications that run exactly as programmed.

Some Use Cases of Smart Contracts

• Intellectual Property – Smart contracts can establish and enforce intellectual property agreements like licenses and allow the transfer of payment in real-time to the property owners. 

• Provenance – Smart contracts protect against counterfeit and theft since blockchains are immutable. The goods sold without a transaction record in a blockchain network will lead to rejection.

• Certification – The job certificates, diplomas, college degrees, etc., can be authenticated using smart contracts. 

• Authenticity – A smart contract can ensure that a product bought by a customer is authentic. 

• Insurance Claims – Insurance sectors can also benefit from Smart Contracts to speed up the claiming process. If a claim meets the conditions, the contract can execute automatically. 

To sum up, smart contracts can offer the following benefits:

• Security – The distributed ledger is impossible to change.

• Disintermediation – Parties can use smart contracts to enter into agreements without depending on a third-party.

• Reduced Cost – As no intermediaries exist in a smart contract, individuals and companies can reduce the cost otherwise incurred on traditional contracts. 

• Near Real-time Execution – Transactions take place almost simultaneously for all the participating parties as soon as the required criteria are satisfied.

• Transparency – Since terms and conditions are visible to anyone, smart contracts create an environment of trust among all the parties in the blockchain network.