Topic: What exactly is the smart contract in the blockchain? (Read 123 times)

What is a smart contract? In general, it can be understood as a smarter contract than a traditional contract, that is, a so-called digital contract. It is written in a blockchain database to execute the program. After the program is written, it must be run according to the established rules. After the conditions are met, the program will be triggered to continue execution. Once a smart contract can't be changed after it is written, users can also rely on this contract completely.

What are the advantages of smart contracts and traditional contracts?

The biggest advantage of smart contracts is the elimination of third-party participation. What impact does third-party participation have on the end? We can give examples to illustrate, for example, the current housing sales market. If there is a third-party intermediary involved, then we need to pay a certain amount of agency fee when we get the housing information. So the total cost equivalent to our last-generated contract includes not only The total housing price also includes a certain amount of agency fees. If the participation of such third-party intermediary can be eliminated, both contract parties can conduct face-to-face transactions, which can not only reduce the cost of contract execution, but also improve the efficiency of contract execution. At the same time, smart contracts are less risky because they cannot be intervened and cannot be modified.

How does a smart contract work? In simple terms, there are three processes. The first is to write smart contract code. The code to be written contains the conditions that trigger the automatic contract execution. Then the generated smart contract is uploaded to the blockchain network and finally sent to other nodes.

In the popular sense, it is the multi-users such as buyers and sellers who work together to formulate a contract. The traditional contract may be written. The smart contract is written in code, a digital contract, and then through the blockchain. The network exposes smart contracts to each user node. That is, each participating user receives the contract. The smart contract is also stored in the blockchain network. When the contract is reached, the result will be Expanding to each node in the form of a block, that is, each user can see the terms of the agreement, ensure the openness and supervision of the contract, and thus the smart contract formed by the block chain can guarantee automatic execution. . The characteristics of smart contracts are that they can be implemented automatically, openly and transparently, and unchangeable. More and more companies are also starting to develop smart contract services. This area has certain practicality and potential for development.