First smart contract platform in Blockchain: Smart contracts are one of the most popular and discussed topics in the blockchain industry. As processes grow digitally, it is necessary to find a way to reliable, digital business agreements.
Smart contracts are a great choice to replace traditional contracts, which are often complicated, costly, and slow.
Smart contracts are gaining wide use and ease of creation. Many smart contracts are available today to optimize financial and business processes for collaborations provided by blockchain consortia such as Hyperledger.
The First Smart Contract Platform in Blockchain
RSK has introduced the first smart contract platform that uses the Bitcoin network. Prior to its major net launch in January 2018, RSK had consistently focused on providing a second layer protocol that would affect the security and reputation of the Bitcoin network and the performance of smart contracts.
In addition to being named the blockchain platform to watch in 2020, it also topped the list for smart contracts along with Ethereum.
Ethereum is probably the most affordable platform for smart contracts. And remains at the top when it comes to using most smart contracts and decentralization to date. Despite competition from many other platforms specifically designed to squeeze out Ethereum, it remains the strongest and most tried and tested – with 2.0 coming out in 2021. It will solve most of its scalability issues by then.
The globally recognized blockchain platform Ethereum was the first to bring smart contracts to the wider crypto community. Ethereum is still the most advanced platform for coding and processing smart contracts. This open-source platform has the largest network of developers and because of this; it can sustain the ever-changing environment in the blockchain industry.
What are Smart Contracts?
A smart contract is a self-enforced agreement between the buyer and the seller, the terms of which are written directly in the lines of code. The agreement and code it contains are available across the distributed and decentralized Blockchain network. The code regulates execution, and transactions are traceable and irreversible.
The first smart contract platform in Blockchain was introduced by RSK using the Blockchain network.
In order to enter into a blockchain-based smart contract, the parties discuss, negotiate and agree to the terms of the contract before remembering (in whole or part) the terms of the smart contract code stored within the blockchain.
Smart contracts enable the performance of trusted transactions without the involvement of third parties. This is a decentralized method, which means that there is no need for intermediaries when verifying contracts.
Smart contracts are automatically executed upon fulfillment of pre-determined terms and conditions, based on the rules programmed to maintain it.
Smart Contract Platforms
Many smart contract platforms are available today. They can be divided based on technology, end-user (banking, government, supply chain, real estate, insurance, etc.), and region (focused on Europe, North America, Asia, or the rest of the world).
There are differences in programming languages, blockchain consensus, the cost of maintaining smart contracts for an application, differences in blockchain security, transaction verification speed, trust in key network nodes, and many others.
Ethereum was the first blockchain platform to develop code adapted specifically for dApp (Decentralized Application on the Blockchain) development. dApp appearance has inspired the arrival of many other platforms, including names such as Cardano, Aeternity, Qtum, Waves, and Stellar.
Key Parts of a Smart Contract
A smart contract is consisting of some of the basic parts: signatories, content, and special terms.
First, the signatories, i.e. two or more parties who use a smart contract and force them to ‘continue’ under the conditions proposed by their digital signature.
Second, the content of the contract is limited only in a smart contract’s environment.
Third, the specific terms of a smart contract. They must be defined in detailed mathematical terms and applied in a programming language that is compatible with the smart contract blockchain. Depending on these conditions, the smart contract will be executed by itself.
Smart Contracts and Blockchain
The key to these deals is a decentralized network called a blockchain. Smart Contract uses blockchain technology to verify, capture, and enforce situations between multiple parties.
A decentralized network known as blockchain is the key to these smart contracts. These contracts use blockchain technology to check, confirm, capture, and enforce terms agreed upon between multiple parties.
Smart blockchain contracts allow transactions and agreements to be executed between anonymous parties without the need for external enforcement, a central body, or a legal system. Transactions in smart contracts are irreversible, transparent, and traceable.
Blockchain is the ideal environment for smart contracts because all the stored data is unchangeable and secure. The smart contract data is encrypted and kept in the ledger, which means that the information entered into the blockchain will never be lost, modified, or destroyed.
Where Can Smart Contracts Be Used?
Smart contracts can be used to work in a wide range of industries. Whether it is regulatory compliance, contractual applicability, cross-border financial transactions, property ownership, home purchase, management of supplies, material sourcing, document management, and many other applications.
Today, smart contracts are important in areas such as the legal transfer of ownership and trade in digital financial assets, banking and credit services, logistics processes, tracking the origin and routes of goods, decentralized storage, and renewable energy use.
Supply Chain Management
One area where smart contracts can be used is supply chain management. Smart contracts can make the supply chain transparent and facilitates the smooth movement of goods and restores confidence in trade.
As products move through the supply chain smart contracts can record ownership rights and confirm who is responsible for the product at any time. The final product can be checked at every stage of the process of delivery until the product reaches the customer.
The insurance industry is another sector where smart contracts could be used. This sector does not have automatic management today. At present processing and paying insurance claims can take months.
Smart contracts can streamline and simplify the calming process by automatically start a claim when a certain event takes place. Specific details can be entered into the blockchain to decide the correct compensation amount.
The mortgage process can also be simplified by Smart contracts. Mortgage agreement terms are based on an estimate of the mortgage’s income, expenses, credit score, and other conditions.
The need to conduct these checks, usually through third parties, can make the process time consuming and complex for both the lender and the mortgagee. By cutting off intermediaries, the parties can deal directly with each other.
The widespread use of smart contracts is in the financial sector, as money and associated documents become electronic. Smart contract opportunities in the field of financial services include, for example, payment processing, financial instruments clearing/settlement, trade finance, as well as regulatory practices such as KYC (Know Your Customer).
Using the Bitcoin network RSK has introduced the first smart contract platform in Blockchain. Smart contracts are gaining wide use nowadays. Several smart contracts are available today for optimizing the financial and business processes for collaborations provided by blockchain consortia such as Hyperledger.
A good potential market for smart contracts is there. Smart contracts can really change the way contracts are made in different industries.
However, smart contracts will take some time and further development is needed before it reaches the mainstream approach. Smart contract technology cannot be implemented at this point because more experiments are needed regarding this technology.
Smart contracts technology at present is still a technology in its infancy. And current challenges particularly legal and regulatory must be addressed first.