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What are Smart Contracts? Explained By CoinsIQ

What are Smart Contracts
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Smart contracts for cryptocurrency

Smart contracts or the self-executing contracts includes the terms of the agreement between buyer and seller these are directly written into lines of code. The transaction between buyer and seller are trackable and irreversible. All the actions are executed automatically.

The idea behind smart contracts

Smart contracts were first proposed in 1994 by Nick Szabo, an American computer scientist who invented a virtual currency called “Bit Gold” in 1998. Bitcoin consists of the basis of contracting the blockchain technology. Szabo defined the main principles of its work at that time, but there was no appropriate environment to realize those contracts at that time. A lot has changed over time with cryptocurrency emerging.

How does smart contract work?

Smart contracts work on the blockchain technology principles the terms of contracts are coded and put into the blockchain. These contracts are looped multiple times between the lines of codes. This contract is executed when the trigger happens. All this works under the terms of a contract.

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To create a smart contract, you need

Subject of the contract

To lock and unlock the program automatically program you are choosing under the contract must have access to all goods and services suiting the contract terms.

Digital signatures

The agreement of the contract is initiated by sign of the participants in the form of the primary key

Contract terms

These terms show the exact sequence of the operation and every participant has to follow these terms.

Decentralized platform

The smart contract is deployed to the Blockchain of this platform and distributed among the nodes of the platform.

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Real life use

Smart contracts can be used in different real-life fields and provide great help for the same.

Elections

Results of voting can be put in blockchain; and then distributed among the nodes of a network. An advantage is all the data is encrypted and anonymous. This avoids manipulation of votes.

Logistics

Smart contracts ensure transparency in the contract terms, fraud protection. It can also provide shipments tracking; with the integration of the Internet of Things. There are some other possible applications; i.e., in management, bank system, insurance, estate, IoT, and others.

Smart contract benefits

Smart contracts use all the benefits of Blockchain technology. Smart contracts provide:

•    Security

The smart contract guarantees that it will not be lost or changed without your permission. It is encrypted and distributed among nodes.

•    Economy and speed

Intermediaries are eliminated; as the process is automated.

•    Standardization

The contracts are standardized according to needs as there are different types of contracts available.

Where can I create a smart contract?

Smart contracts are implemented in blockchain with varying degrees.

•    Complete support for deals

The support team is there to help you during the whole cycle; answering your questions and solving your queries.

•    Being suitable for non-programmers

Almost all platforms require programming skills or programming services.

•    Arbitration availability

The third party involvement requires additional unnecessary waste of time and resources.

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