How soon will the storm of Smart Contracts take over the entire digital world? Apparently the vision of the pioneers for Web3 – it does seem to come to a reality when digital revolution will primarily drive on the back of Blockchain.
A] First Let Us Define BlockChain
A BlockChain is essentially a shared accounting ledger that uses cryptography and a network of computers to track assets and secure the ledger from tampering. Bitcoin, the digital cryptocurrency and Ethereum are two popular applications of BlockChain. The difference between the two being that BitCoin offers only one type of BlockChain application while Ethereum offers a platform to develop decentralized applications.
Ethereum seems to come together nicely as a web3 platform that supports decentralized application development. In simple terms, it is a decentralized platform that runs smart contracts. Let’s try to understand what is meant by decentralized platform and Smart Contracts.
B] Why Is There a Need for Decentralized Applications?
As the world moves towards automation and artificial intelligence more and more applications on the internet will prefer to have lesser censorship and control by a central authority. What does this mean when it comes to accountability? Who is held responsible for failure — the answer would be in terms of what does failure mean in this case?
Does failure refer to a hardware failure – which is the reason for shifting to a decentralized platform where failure moves away from a single point/server or location or node? Distribution in terms of maintaining transactions that take place across the network then becomes a primary feature of the decentralized platform. BlockChain works with a very powerful encrypted protocol which also makes it very difficult to alter.
C] What Are Smart Contracts?
Smart Contracts are programs that run in the Ethereum network and are meant to be; smart, irrevocable, transparent, and secure.
It will depend on the imagination of the developer and the product owner to develop suitable applications – that can leverage existing or custom-developed Smart Contracts that can run flawlessly on the platform. Smart Contracts development using Solidity as the development language will figure in the primary list of development stack of future developers.
One of the most popular applications of Smart Contracts has been to create new cryptocurrencies. Some popular examples found everywhere are in the Insurance Industry, Entertainment Industry, Financial Industry. Also, Smart Contracts allow reducing costs since you can get rid of intermediaries.