In this article, we will learn what smart contract platforms are and where they are used.
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Introduction
Smart contracts are a type of digital contracts stored on a blockchain or distributed ledger technology. Smart contracts are written in various programming languages (Solidity, Web Assembly, etc.). Smart contracts are automatically activated by a predetermined set of actions or functions. Once activated, smart contracts are generally irreversible but can still be monitored.
History
Since the emergence of Bitcoin, blockchain technology has become one of the fastest growing and evolving technologies in today’s society. Known primarily for its role in cryptocurrency circles as an innovative distributed ledger technology used to facilitate decentralized commerce, blockchain technology has evolved into a variety of other industries and has been used with countless other technologies. One of the most important and popular inventions today is smart contracts.
Smart contracts were first proposed in the 1990s by a computer scientist and lawyer named Nick Szabo. Szabo compared the smart contract to a vending machine that we still use today. Let’s imagine a vending machine that quenches thirst in exchange for money. If you put some money into the machine and choose a water, the machine will give you the water you bought and pay you the remaining change (unless you choose something else). This is an example of a simple smart contract. Just as a vending machine can automate sales without a human intermediary, smart contracts can automate almost anything.
Working Principle of Smart Contracts
Smart contracts are written in various programming languages (Solidity and similar...). With these and similar programming languages, coders and software engineers work by taking advantage of one of the simplest computer programming techniques known, the "if" statement. Essentially, statements that follow the "if...then" logic are coded into a blockchain. The blockchain where this transaction takes place is then updated when the transaction is completed. According to blockchain and cryptographic technology, this means that the transaction cannot be changed and only those with permission can see the results. Every transaction is recorded in distributed ledgers.
In a blockchain network, the code of each smart contract is stored, allowing any interested party to verify its functionality by examining the code and current state of the contract. With blockchain distributed ledger technology, each computer on the network stores a copy of all existing smart contracts and their current states, along with the blockchain and transaction data, and matches them with each other.
Smart Contract Applications?
Some of the major blockchains that smart contract platforms can run on are: Bitcoin (BTC), Ethereum (ETH), BNB, Solana (SOL), Cardano (ADA), Tron (TRX), Chainlink (LINK), Stellar (XLM), and similar blockchains. Smart contracts are programmed to run on these and similar blockchains.
Smart contract-powered applications are often called "decentralized applications" or "dapps." They also include decentralized finance (DeFi) technology. DeFi applications allow cryptocurrency holders to access complex financial transactions from anywhere in the world without the involvement of a bank or other financial institution.
What is Dapp and Where is it Used?
Dapps are computer programs. Defined as decentralized applications, "dApps" run on a blockchain or peer-to-peer network (P2P). Due to the nature of their decentralized operation, they are not dependent on an authority or controlled. Dapps offer greater security and transparency. Dapps use smart contracts to enable and perform their functions.
Some examples of Dapps include:
Financial services: Dapps are made to facilitate financial transactions, such as the exchange of currencies or assets.
Housing: Dapps are made to help track property ownership and documents such as title deeds. Because with an application built on blockchain, information cannot be changed or deleted. Decentralized technologies have also been developed to reduce transaction costs when purchasing property.
Supply Chains: Dapps are made to increase transparency and accountability by automatically tracking traded goods across international supply chains. Records on the chain are kept under control.
Education: One proposed use of Dapps is in the education sector as a way to create decentralized learning platforms that allow students and educators to interact and collaborate directly.
Cybersecurity and Authentication: Decentralized applications have been embraced by the cybersecurity sector as a potential way to securely store and verify identity information.
Healthcare: Health information is very valuable. Dapps (via smart contracts) provide an ideal environment for storing and tracking health records, especially in an international setting.
NFTs: A number of Dapps are being used in a similar manner to provide a decentralized marketplace for buying and selling NFTs.
Conclusion
We have learned that there are many benefits to using smart contracts in today's digital environment. Since smart contracts are completely digital and automatically triggered, they work on a blockchain network, they reduce the cost rate, minimize the possibility of errors, and are secure with their transparent and immutable structure. In addition, records and transactions are encrypted, accountable to everyone else in the chain, and immutable. Due to the nature of working on a decentralized ledger/network, all participants in the chain have access to the transactions performed by each smart contract. This makes all members of the process accountable to all other parties involved in the process.
We see that the use of smart contract platforms is increasing with the development of blockchain technologies. As humanity's knowledge and level of development increases, the number and use of smart contract platforms will also increase.
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