Blockchain Technology – Quick Overview

Blockchain Technology – Quick Overview

Blockchain is a shared, immutable ledger for recording transactions, tracking assets, and building trust. Virtually anything of value can be tracked and traded on a blockchain network reducing risk and cutting costs for all involved.

What is Blockchain Technology?

SMART CONTRACTS

on BLOCKCHAIN Technology

A smart contract is a digital contract stored on Blockchain which will be automatically executed when certain predefined terms & conditions are met.

These smart contracts are used to automate the execution of an agreement so that all the parties involved can be certain of the outcome without the need for an intermediary. This saves time and money.

Smart contacts can also automate any type of workflow, triggering the next phase when certain conditions are met.

How smart contracts work

Smart contracts work by following simple “if statements” that are written into code on Blockchain. The network of computers executes certain predefined actions when certain predefined conditions are met and verified. Some examples include releasing funds to a subcontractor, sending notifications, starting an insurance policy, etc. When the transaction is completed, Blockchain is updated which means that the transaction cannot be changed and only the parties who have permission can see the results.

How smart contracts get built

There are stipulations within a smart contract to satisfy the participants:

  1. To establish the terms, the participants have to determine how the transactions and their data are represented on Blockchain.
  2. Agree on the rules that govern those transactions, think of all the possible exceptions, account for them, and then define a way of dealing with disputes.
  3. When all these terms are clear and well defined, the Smart Contract can be programmed, usually by a developer.

Benefits of Smart Contracts

Let’s look at some of the advantages of using Smart Contracts over the traditional way of dealing with agreements.

Speed, Efficiency & Accuracy

The Smart Contract is immediately executed once a condition is met. Since these contracts are digital and automated, paperwork and human error are eliminated making everything faster and more efficient.

Trust & Transparency

Because the encrypted records of transactions are shared across participants, there is no need for a third party to check if information has been altered for personal benefit.

Security

Encrypted transaction records are hard to infiltrate on Blockchain. Because each record is connected to the previous and subsequent records on this distributed ledger, hackers would have to alter the entire chain to change a single record.

Savings

Smart Contracts remove the need for intermediaries to handle transactions and verify all data. This leads to a reduction in associated time delays and fees.

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