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Today, the editor will share with you the relevant knowledge of what the concept of blockchain intelligent contract is. The content is detailed and the logic is clear. I believe most people still know too much about this, so share this article for your reference. I hope you can get something after reading this article, let's take a look at it.

The centralized business model is giving way to a decentralized model

The traditional business relationship model is centralized, and there is always a third party, which is located in the ongoing transaction and confirms the terms and conditions of the contract between the two parties. The third party may be a banking agency, law enforcement agency, government agency or other intermediary.

When establishing relationships in a centralized model, enterprises rely on intermediaries, which puts customers at risk. In addition, the central system cannot guarantee the payment and implementation of contracts.

The development of blockchain technology enables enterprises to establish decentralized models, which opens up a new field of vision for enterprises to carry out transactions and reach agreements. One of the technologies proposed to replace the traditional model is the intelligent contract.

Intelligent contract concept

Although the hype of smart contracts has grown with the growth of hype around blockchain technology, the term smart contracts actually appeared more than 20 years ago. Computer scientist and cryptographer Nick Szabo wrote an article about intelligent contracts in 1995.

The concepts provided by Szabo are exactly the same as what smart contracts currently offer, including the idea of implementing and storing smart contracts in distributed ledgers.

So what exactly is a smart contract?

What is a smart contract?

A smart contract is similar to a contract in the physical world, but it is digital and represented by tiny computer programs stored in the blockchain.

More specifically, a smart contract is software that stores rules for negotiating the terms of an agreement, automatically verifies implementation, and then enforces the agreed terms.

What is the main idea of smart contracts? Because smart contracts do not rely on third parties to establish business relationships, the parties who have reached an agreement can trade with each other directly.

Take a crowdfunding platform as an example, where product teams share their projects and collect money from supporters until they achieve their goals.

If such a platform is centralized-such as Kickstarter, then it is a third party between the product team and the supporters of the donor. This means that both sides need to trust Kickstarter and, in fact, pay an extra fee to Kickstarter as a middleman.

Smart contracts can also perform the same crowdfunding initiatives-sharing projects, setting goals and collecting donations, but without third parties. In short, we can write smart contracts to perform all of these operations.

More specifically, we can compile a smart contract to receive funds until we reach our goal. If the project is fully funded before the deadline, the automatically raised funds will be transferred to the product team. If the project fails, the funds will be automatically returned to the supporters.

Because smart contracts are stored in a blockchain, where all data is stored in a distributed manner, no one controls the money. In a decentralized business model, smart contracts replace any other trusted third party. This leads to a very important question:

Why trust smart contracts?

Smart contracts are designed and implemented in the blockchain, so they inherit some of the attributes of the blockchain:

They are immutable, which means that smart contracts will never change, and no one can tamper with or break contracts.

They are distributed, which means that the results of the contract need to be verified by everyone in the network, just like any transaction on the blockchain. Distributed makes it impossible for attackers to forcibly control the release of funds because all other participants detect such attempts and mark them as invalid.

The way smart contracts work

A smart contract is a program, or more simply code. The code behind the smart contract contains specific terms that are executed when triggered by a specific engagement event.

Let's take a look at an example of how a smart contract works if Alice rents a house in Los Angeles and Bob in New York wants to rent a house to travel there.

A logical behavior algorithm

Usually, Alice and Bob use platforms that connect the host and the guest to agree to rent. Such a platform will act as a third party and will certainly be responsible for complying with the agreed terms. However, both Alice and Bob will be charged by the platform. In addition, if either party fails to fulfil its commitments, dispute resolution may be time-consuming and require detailed review.

If Alice and Bob reach an agreement instead of using a smart contract, the smart contract will perform logical operations according to its algorithm and guarantee that all agreed terms and conditions are met. Smart contracts are immutable. This is the DNA of Smart contracts. It won't let Alice or Bob cheat.

Therefore, the following terms and events can be listed in the smart contract between Alice and Bob:

1. A separate store has been created, and both Alice and Bob can be assigned, but cannot be changed.

two。 Bob saves money in the storage area.

3. Alice put her apartment address and code in the storage area.

4.Alice receives payment confirmation, Bob receives address and apartment code.

5. If Bob comes to Los Angeles and the address and code provided by Alice are correct, then Alice will receive payment.

6. If it appears that the address or code provided by Alice is incorrect, Bob will recover his money.

7. If Bob doesn't come to Los Angeles, Alice will get damages for breach of contract and Bob will get the rest of the payment.

8. At the end of the agreement, the intelligent contract is considered to have been fulfilled and is still stored in the blockchain network.

This set of conditions and events represent the most basic one-time intelligence contract. Setting terms in the code of a smart contract ensures satisfactory execution.

Blockchain technology itself ensures the performance of the overall contract, because the complete copy of the blockchain is publicly stored by all network participants, and the intelligent contract remains immutable.

All-in-one-- the Logic of all-Intelligent contract

Once Alice generates a smart contract that can rent out her apartment to Bob and work for her automatically and transparently, she may consider creating a generic agreement for all other tenants so she doesn't need to create a new smart contract for every new guest.

Under this universal agreement, anyone on the blockchain network can rent Alice's apartment according to the above algorithm: potential guests transfer the rent, get the address and apartment code, and then if everything works in accordance with the terms of the contract, Alice will receive payment.

In addition, smart contracts can be more common. We can compile a smart contract that can be used not only by Alice, but also by anyone who wants to rent his or her apartment. Of course, smart contracts can include more specific conditions, such as automatically adjusted prices, discounts, partial payments, and almost any other conceivable option.

Blockchain network using intelligent contract

Much has been said about intelligent contracts for blockchain technology. Although there are many examples of smart contracts in different blockchain networks and projects, Bitcoin and Ethernet Square are still the most noteworthy.

Bitcoin

Although Bitcoin is known primarily for its cryptocurrency transactions, its protocols can also be used to create smart contracts. Bitcoin provides a programming language that allows you to customize smart contracts such as multi-signature accounts, payment channels, hosting and time locks. In particular, an independent intelligent contract platform called RootStock has been established on the block chain of Bitcoin.

Tai Tai Fong

Yi Tai Fong is the most prominent intelligent contract framework, which is specially created and designed to support smart contracts. The framework is programmed in Solidity language and is a decentralized platform that can run smart contracts without downtime, censorship, fraud or third-party interference. Taifang block chain database stores transactions between personnel, involving transactions in intelligent contracts and their source code.

Benefits of smart contracts

The core and blockchain attributes of explicit programming algorithms (such as decentralization, transparency, fraud prevention, etc.) make smart contracts a reliable alternative to building business relationships and executing transactions.

As an alternative to traditional contracts with a centralized business model, here are the benefits that smart contracts offer to enterprises:

Deal directly with clients. Smart contracts eliminate the need for middlemen and allow for transparent, direct relationships with customers.

The resistance failed. Because companies do not rely on third parties, no one or entity controls data or money. Decentralization means that even if any individual leaves the blockchain network, the network will continue to operate without losing data or integrity.

More trust. Business agreements are automatically and enforced. In addition, these agreements are immutable and therefore unbreakable.

Reduce fraud. Because intelligent contracts are stored in a distributed blockchain network, the results will be verified by everyone in the network. As a result, no one can enforce control over the release of other people's funds or data, because all other blockchain participants will notice this and mark such attempts as invalid.

Cost-effectiveness. The elimination of middlemen can waive additional fees, so that enterprises and their customers can not only interact and trade directly, but also charge lower fees or no additional fees in the transaction.

Keep the record. All contract transactions are stored in the block chain in chronological order and can be accessed with the full audit trail.

Intelligent contract use case

Smart contracts are becoming more and more popular and have been implemented in various blockchain projects. Here are some of the most promising examples of smart contract implementation in different industries.

Banking industry

Banking may be the main industry in which smart contracts seem to be the most important alternative to traditional trading models. With smart contract payments and loans, almost all other financial businesses can actually be automated.

KYC-Chain implements smart contracts for individuals, businesses and financial institutions. Its core is mechanisms that allow customers to comply with regulatory norms, such as automatic intelligent inspection, as well as sharing relevant documents and digital verification through notaries and institutions.

Health care

Smart contracts can also improve health care. They can simplify insurance trials, increase access to cross-agency data, and increase patients' confidence in protecting privacy. Authentication, authorization, and identity confirmation are still unresolved issues for smart contracts executed on blockchain networks. Dentacoin is an example of smart contracts in the medical industry. It aims to bring patients and dentists together to improve dental care and make it affordable around the world.

Supply chain

Another area where smart contracts can provide real-time visibility is the supply chain. Smart contracts ensure fine inventory tracking, facilitate supply chain financing, and reduce the risk of theft and fraud. Smart contracts can be used effectively regardless of the type of market or the goods sold. For example, Name Bazaar is implementing intelligent contract technology in peer-to-peer markets where users can exchange encrypted assets on block chains in the form of domains.

Legal issues

The traditional model of solving legal problems and supporting documents has also given way to smart contracts. Smart contracts eliminate the need for notarization, providing not only automation and unbiased, but also cost-effective solutions. Nottar.io explains the concept of using ethernet block chain notarization documents.

Real estate

You have learned the simplest concept of how smart contracts work for real estate in the "how Smart contracts work" section. Of course, real-life projects are more complex and comprehensive and need to cover a wider range of issues and opportunities. For example, FOAM is the stock market for real estate, which uses technology to allow users to trade real estate, obtain financing and funds, and manage leases.

The government

It may be most interesting to investigate the potential impact of decentralized technology on monopolistic areas, especially government systems. The Australian company Horizon State is trying to provide voting and other tools to help the democratic process. In particular, it intends to provide a blockchain-based voting ecosystem that supports safe, cost-effective advertising operations for a range of election types and voting parameters. Its main goal is to achieve transparent and unbiased voting in countries around the world.

Internet of things network

The Internet of things (IoT) is one of the areas where smart contracts intersect with other technologies. The combination of smart contracts and the Internet of things is so powerful that it can achieve a major transformation across industries, paving the way for new decentralized applications. The Oaken project proves this. It provides autonomous Internet of things hardware and software as well as blockchain technology. All in all, these components enable Oaknen to be used with almost any device to build an Internet of things network, which can be used in a variety of real life.

These are all the contents of the article "what is the concept of blockchain Intelligent contract". Thank you for reading! I believe you will gain a lot after reading this article. The editor will update different knowledge for you every day. If you want to learn more knowledge, please pay attention to the industry information channel.

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