What is Smart Contract and How does it work?
By: Sophia Casey
Tags: Smart Cities, Smart Contracts, Blockchain, Smartcontractdevelopment, Smart Contract Blockchain

The evolution of Blockchain technology has brought with it some amazing changes and developments, and they have been the most transforming ones in recent years. Blockchain has given us many benefits like decentralization, transparency, peer-to-peer interaction and more, with all these set of advantages, one thing that needs a mention is about smart contracts. The latter has completely transformed how the business operates, and agreements are executed. In this blog, we will be elaborating on the working of smart contracts and its benefits.

What is a smart contract?

Before heading to understand the importance of the smart contract, let’s have a quick snap at what the smart contract is. In simple words, these are pre-programmed contracts which have a set of terms and conditions that are decided by the two involved parties. This contract runs on a Blockchain platform, and once the conditions are met, the payment is executed.

Smart contracts are basically written in Solidity and are considered to be the creators of a new era of contract execution.

Working on smart contracts:

While many of us think that a smart contract is a new entrant, the fact of the matter is that this concept was introduced in 1994. Yes, you read it right; the idea of smart contracts was first proposed in the year 1994 by Nick Szabo. He was a computer scientist who also invested virtual currency Bit Gold in 1998. Well, there are rumours that Szabo is Satoshi Nakamoto, the man behind the revolutionary cryptocurrency.

Szabo wanted to transform the functionality of electronic transactions methods like POS and make it more transparent and fast.

Key components of smart contracts:

A smart contract consist of different parts:

Signatories- These are the parties that are involved in the signing of the smart contract. They decide the conditions and then give a final go forward regarding the proposed terms via digital signature.

Subject — the subject is limited only within the contracts

Specific terms- These are detailed mathematical terms and implemented programming language which is compatible with smart contract’s Blockchain. It is based on these specific terms that the contract is executed.

Smart contracts use is not limited to just one field; it finds a multitude of use cases in fields like supply chain, finance, real estate, education, and others. Blockchain developers who have expertise in creating smart contracts hold a promising future. One can also learn about smart contract creation by opting for certification courses in the same domain. Blockchain Council is providing the right learning platform to those who wish to make a career in this field. For more information, you can connect with the Blockchain Council today.

The way ahead

Blockchain and smart contracts are a few of the new technological developments that have the potential to completely transform business operations. They can streamline the processes, and at the same time, increase productivity by reducing the time. Hence, any individual who holds expertise in this profile can surely take their career graph up by opting for a blockchain certification course in this domain.