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What is Smart Contract?

What is Smart Contract?

Smart Contract is a terminology describing the ability of automatically generating terms and automatically executing deals by using the Blockchain technology. All the operating process of Smart Contract are automatic without any intervention from outside. In Smart Contract, every term is considered as a legal contract and is saved in the network by its own language.

what-is-smart-contract

What is Smart Contract?

Smart Contract is born with the purpose of ensuring all the transactions on the Internet between unknown clients, which does not rely on any intermediate organization. The definition of Smart Contract was first introduced in 1993 by Nick Szabo – the one who was considered to create Bitcoin. He said that Smart Contract is an automatic computing that helps us to execute the terms of contracts.

Differences between Traditional contract and Smart Contract

The traditional contract, which is created by legal experts, includes a lot of terms requiring the third party to execute. This consumes a huge amount of time and is not transparent. When the contract is in trouble, it depends a lot on the legal system to resolve the problems, which costs unnecessarily.

The Smart Contract is created by computing algorithm basing on a programming language like Go, C++, Java, Python. In this kind of contract, it is clear that one term is under the responsibility of whom, and corresponding penalty. However, when it comes to Smart Contract, there no requirement of human, thus everything is ensured to be done exactly and transparently. All of the code of Smart Contract is executed by the Blockchain.

Conclusion

Above is my article about “What is Smart Contract”, which is a basic concept of cryptocurrency World that you need to know. Hopefully, you have found useful information in my article.

For more cryptocurrency articles, please follow me. Thank for reading.

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