ProgrammerSought

Warp  Speed ​​Future, a blockchain security consulting company, said: Now our life is almost inseparable from the contract. To put it in a big way, work is a labor contract signed with the company, buying a house is signing a house purchase contract with a real estate company, and buying insurance is a contract with the company. Insurance companies sign insurance contracts; to put it mildly, online shopping, ordering takeaways, taking taxis, and buying lottery tickets are all signed contracts with related service providers. With the development of science and technology, smart contracts have gradually entered everyone's field of vision. At the same time, the evaluation of smart contracts on the Internet is also mixed. So is smart contracts a gimmick or a future business trend?

What is a smart contract 

It can be said that contracts are used wherever there are people, and at the same time executing contracts requires a lot of social resources. Traditional contracts are exchanged by two or more parties through an agreement, and two or more parties must trust each other to perform the transaction. Otherwise, once a party defaults, it may have to resort to social supervision and judicial institutions.

For example, two companies, A and B, signed a contract. Later, A violated the contract, causing B to suffer heavy losses. B wanted to get back what belonged to him, so he sued the court. Even if B wins the lawsuit, after the judgment takes effect, he still needs to apply to the court for enforcement, including filing a case and providing property clues. After this whole process, everyone involved is very haggard, especially B, who was originally the victim.

In an episode of Friends, Rachel and Monica make a bet with Chandler and Joey to give the men $100 if they can guess what's in the shopping bag. Later they guessed right, but Rachel and Monica reneged on their bills. No matter how much Qian De asked for it, the women would not give it. In this case, it was impossible for Chandler and Joey to grab the girl's wallet to get the $100, so they had to admit it.

So in these cases, everyone is often more passive. But with a smart contract, if company A triggers the terms in the contract, the code is automatically executed. In other words, if the conditions are met, it will be executed, regardless of whether Company A is willing or not, which will save a lot of trouble for the victimized Company B.

At the same time, there is a smart contract, once the boys guess right, no matter how Rachel and Monica cheat, the smart contract code will be automatically executed and the $100 will be credited to the boys' accounts. If it is said that the agreement between friends does not need to be serious, how about borrowing tens of thousands of yuan to relatives, signing a lease with the landlord for one year, purchasing critical illness insurance and other scenarios that are related to your vital interests?

Where is smart contract compared to traditional contract intelligence?

Compared with traditional contracts, smart contracts have three characteristics. The first content is open and transparent; the content of the second smart contract cannot be modified. Third, as long as the blockchain exists, smart contracts can run forever. There is a sense of brotherhood that "the chain is in the contract".

Compared with traditional contracts, smart contracts supported by the three major characteristics of blockchain have the following advantages:

Trust first. Since the smart contract is based on the blockchain, the content of the contract is open and transparent and cannot be tampered with. Code is law. Based on the trust in the code, traders can conduct transactions safely and securely in an untrusted environment.

The second is economical and efficient. Compared with traditional contracts, disputes are often caused due to differences in understanding of the terms of the contract; smart contracts can avoid differences through the calculation language, hardly cause disputes, and the cost of reaching a consensus is very low. On the smart contract, the arbitration result comes out, and the execution takes effect immediately. Therefore, compared with traditional contracts, smart contracts have economical and efficient advantages.

Thirdly, no third-party arbitration is required. Suppose A and B make a bet on whether it will rain tomorrow, and whoever loses needs to give the other 100 yuan. If the loser denies, the winner won't get the reward. For this reason, it is inefficient and time-consuming to go to a third-party arbitration institution. But if the bet is written on the smart contract, when the bet is reached, each puts 100 yuan into the smart contract address, and the smart contract is automatically executed according to the final result, and the winning party takes all the rewards. It can be seen that smart contracts do not need third-party arbitration.

Application of smart contracts

With the popularity of smart contracts, we will also become more Buddhist. In the face of potential disputes, there is no need to go out on your own, and all codes have the final say. For example, if you buy delay insurance by plane, claim settlement becomes much easier. Insured passenger information, flight delay insurance and real-time flight dynamics are all stored on the blockchain in the form of smart contracts. Once the flight is delayed and the compensation standard is met, the compensation will be automatically debited to the insured passenger account. The policy processing is very efficient, and you do not need to talk to the staff or argue about the time of the compensation plan.

Another example is credit sales between enterprises. Although a contract is signed in black and white, when the other party has a spirit of insisting on shameless payment, he will always default on the account. And if you don't have the courage to tear your face or take the other party to court, you won't be able to get your accounts receivable back. A smart contract may be one of the solutions. Of course, the premise is that both parties package the loan amount, repayment time, and bank card information bound by the other party into the contract. On the agreed repayment date, the loan will be automatically transferred to your account.

Warp Speed ​​Future, a blockchain security consulting company,  said: In the coming blockchain era, smart contracts will bring great convenience to our lives and are more conducive to building an honest social system. At present, smart contracts are slowly accumulating power, and one day they will be widely integrated into the lives of ordinary people.

The content of this article was compiled and compiled by WarpFuture.com, a security consulting company. Please indicate when reprinting. Warp Speed ​​Future provides relevant blockchain security consulting services including main chain security, exchange security, exchange wallet security, DAPP development security, and smart contract development security.