A Contract is a legal agreement made between two or more parties or people. If any of the party involved think the other party is violating any terms of the contract, they can reach a court of law for a viable resolution.
In the modern world, contracts are used in almost all the fields that exist. For example, employment contract, delivery contract, lease contracts, Loan contracts, etc.
Each jurisdiction has specific norms for writing and signing a traditional contract. If done wrong then they would be invalid for legal action in case of any party broke the agreement. So, they require a lot of human intervention to ensure everything is according to the norms.
Smart Contracts
In simple terms, the computerized versions of Contracts are called Smart Contracts.
The concept of smart contracts can be dated back to 1996, and the idea is proposed by Nick Szabo, a computer scientist.
Typically a smart contract would have the features like:
- Immutable – once created cannot be tampered by anyone
- Indestructible – Conventional contracts are majorly based on paper. As the years go by, they might be damaged, or anyone can try to destroy them. Even though electronic means are coming up - being centralized – could make them susceptible to hacks. The smart contacts are, indeed, not easy to destroy – and this quality majorly depends on the platform it is being implemented.
- The code is Law – Conflicts if any are dealt by the smart contract itself. Nobody’s intervention is required.
The unique features of the smart contracts make them a valuable proposition in the contemporary world. Even though the concept of smart contracts is available more than two decades ago, there was a lack of a robust platform that can implement them.
The onset of the blockchain technology showed new roads for implementing smart contracts. Ethereum blockchain is one such whose core functionality is providing itself as an indispensable platform for Smart Contracts. There are many blockchain platforms available: NEO is often mimicked as Chinese Ethereum. NEM, Bytom, Lisk, are some notable platforms.
Anybody can build and deploy a smart contract on Ethereum. There is no restriction unless gas, a term coined for transaction fees, is paid.
Ethereum Smart Contracts
Anybody can build and deploy a smart contract on Ethereum. There is no restriction unless gas, a term coined for transaction fees, is paid.
Solidity, a JavaScript look-alike programming language, is used for developing smart contracts.
EtherEcash is built on top of the Ethereum blockchain utilizing the smart contract technology of the platform. The key aspect of EtherEcash network is to make borrowing money as easy as using instant messaging. Whenever a loan is granted, a smart contract is created on the terms mutually agreed by the borrower and the lender.
Conclusion
Smart Contracts depend entirely on the source code. A poorly written code would bring disasters. On the other hand, a well written and vetted smart contract can cut cost and saves time to a greater extent. Also, it does not mean that traditional lawyers are out of the game. The developers and Lawyers have to work together for making Smart Contracts a completely reliable technology.
