So What is a Smart Contract Anyway?

Smart contracts are a piece of software, or code, that is purpose built to execute certain parts (or all of) an agreement between two parties. What sets a smart contract apart from other contracts is that a smart contract sits on a blockchain based platform waiting to have predetermined factors met so it can automatically perform its function. 

Since it resides on a blockchain, it is actually replicated across hundreds if not thousands of nodes so it benefits from all the security, permanence and immutability that all these blockchain nodes offer.

This replication also means that as each new block is added to the blockchain – the smart contract is triggered to be executed and will carry out its pre-planned functions provided the factors set into the contract at its creation have been met. These actions could be anything from executing a sale or a transaction to triggering a totally different action based on other predefined parameters. 

However, all this happens ONLY if the factors listed in the smart contract at its creation have been met. If there was no predetermined action or conditions have not been met, the contract would do nothing.

Since smart contracts operate with “if this then that” parameters, they need to be very specific and objective. While they may be quite basic now, they will undoubtedly become far more complex in what they are capable of in the years to come. Currently, if a more complex action is required, multiple smart contracts would need to be leveraged to complete the task. 

Future smart contracts will become far more complex for developers to create and deploy so the use of a smart contract creation platform such as Viveel will be critical. Smart contract creation platforms help speed up production while increasing the security of the actual contract by reducing the possibility of human error. 

Organizations of all sizes from around the world are beginning to leverage blockchain technologies at an exponential rate. Chances are, you have already benefited from smart contracts and not even known it.