Purpose of this post
First of all before reading i want to point out that i don't upload content with very detailed information about a subject since i know there are many bloggers out there who already do that. In this difficult world of crypto i feel like it's important to reach a bigger target audience wich is the group of people that don't know much about crypto yet. For that reason i mainly summerize and simply information for newer crypto players. Simplicty is key to understanding.
So now tell us what does a Smart contract do?
I assume we all have some basic knowledge of what a contract is and what arrangements are, so lets dig immidiatly into the problem and what smart contracts try to solve. The problem with written agreements these days for buying a car or house is that is all goes by paperwork and takes away alot of time before you actually own what you want. Isn’t it the information about the car that has to be transfered from person A to B that takes alot of time, than it will be the hours and hours you need to spend in your house and the people you need to eventually be able to enjoy your new house.
Smart contracts on the blockchain solve this probem! It’s a simple “if-this-than-that” code on top of the blockchain. Let’s say the blockchain is the 1e layer of the technology and the smart contract is the application on top of the blockchain. This smartcontract is known as a token. You can purchase tokens with ether. Ether is the currency of the ethereum blockchain just as bitcoin is the currency of the bitcoin blockchain (every coin has is own blockchain, a token doesn’t have a blockchain cause it’s a smart contract VERY IMPORTANT!)
Example
Someone purchased a car with cartokens. Once the person bought the car with cartokens the information and ownership of that car can be found in the ethereum blockchain and his name will be on it. Imagine that you want to buy his car after let’s say 2 years? You simply transfer your cartokens for his car and ownership of that car. Since the blockchain contains information that’s immutable we can trust the information and can easily make the trade. Once i send my tokens (the smart contracts) the “if-this-than-that” magic happens. When i transfer my tokens for his car, the information of the product will be mine and a digital signature will confirm that it’s a 100% my car from now on. The smart contract will broadcast this information of new ownership to the ethereum-blockchain and will automatically update the changes to the blockchain😎
Long term vision with the use of smart contracts
The solution of using smart contracts can save up many hours of work that come from monitoring, adjusting and storing information. It can all simply be done with the use of a digital code and can easily disrupt the way we run our daily jobs. Funny enough its not a probability anymore. Its very likely this will be adopted in our daily life since the need for it is way to big. Its just not yet nog discovered by the majority of the people and so it's just a matter of time before we can use it as an extension of ourselves just like our smartphone. This article explains very well how it can affect our future life! https://steemit.com/cryptocurrency/@enokkei/jobs-and-industries-blockchain-will-eliminate-or-disrupt
Investing on blockchains that offer the use of smart contracts.
I am currently analyzing multiple coins such as Neo, Waves, Qtum, Cardano, Steem etc to get a better view on why i should invest on Qtum and maybe not in Cardano. And why i should own a little Neo and not Waves? They both pay dividend? My main question towards anyone that wants to invest in crypto is "what do we really need and wich players offer the best service/product"? I personally think that smart contracts can become a big thing and that the demand for it is bigger than the supply. Not to forget that prices of altcoins have been declining and reached strong zones of support. Dollar cost averging yourself in coins that you see value isn't a bad idea as long as you don't spend the majority of your equity in cryptoassets. Having your money backed in euro's or dollars is also a great position. Having a small portion of your equity in assets is also a great thing to do.
Thankyou for reading and have a nice day.
Sem
