Written by - Ayushi Tewary
Uploaded on - 30/10/2022
Smart contracts are very popular these days. But what are they??
What do smart contracts mean??
The term smart contract was first used by Nick Szabo in 1997, long before bitcoins were created, he is a computer scientist and cryptographer, so I will spare you his exact words. But more simply: He wanted to use a distributed ledger to store contracts. Smart contracts are now the same as real-world contractors. The only difference is that they are completely digital.
As a computer scientist and cryptographer, he brought together the idea of digital currency and the idea of contractors working digitally. A smart contract is a small computer program or intelligent digital code used in the exchange of assets including shares, money, or property without the need for any intermediate products and is stored in the blockchain.
The concept has evolved over the years, but it properly retained its identity when the blockchain came into being. Once Bitcoin is released, it comes to support smart contracts, but only allows simple smart contracts to be created and executed. " Ethereum " introduced the use of smart contracts to real-world use cases. "Vitalik Buterin" Founder of Ethereum.
Let's Now get to the point.
Ethereum is a technology that is the equivalent of digital money, global payments, and applications. The community has built an endlessly growing digital economy, bold new ways for creators to make money online, and much more. It's open to everyone, wherever you are in the world - all you need is the internet on your phone. It was specially made and designed to support Smart Contracts.
Since every coin has two sides, the head and tail the same, if smart contracts have their advantages, they must also have some disadvantages.
Now that we know about the origins of the smart contract, it's time to look at blockchain-based smart contracts.
Satoshi Nakamoto released the first cryptocurrency Bitcoin in 2008. It used the following blockchain technology at its core.
The Bitcoin protocol can only be used to create simple smart contracts. However, there were many teams around the world working on the technology and implementing smart contracts.
Well because smart contracts are stored in the BLOCKCHAIN??
No, it's because they inherit some important traits. They are immutable and distributed. Being Immutable This means that once a smart contract is created, it can never be changed. So no one can go behind your back and tamper with your contract code. And tampering means that the output of the contract will be verified by everyone on the network. So a single person can't force a contract to release the pool because other people on the network will notice the attempt and mark it as invalid. Tampering Smart contract becomes almost impossible.
Indian Context:- Section 10 of the Indian Contract Act, of 1872 states that a contract must ascertain the essential elements – offer, acceptance, intention, and consideration. Thus, smart contracts can be considered proper and valid contracts under Indian law.
According to the Global Opportunity Analysis and Industry Forecast, 2021-2026, 106.7 million people were found to be enjoying smart contracts in 2019 and it is estimated to reach 345.4 million by 2026.
Beyond contract enforcement, technology can revolutionize the way contracts are performed. Thus, it is most important for the Indian government to act and frame legitimate guidelines for using blockchain technology and smart contracts.