If your search for the meaning of smart contacts brought you to this page, then you have come to the right place as this is an article that explains the concept in clear and simple terms. By way of definition, a smart contract refers to an existing computerized code which breaks down the process of executing agreements. By so doing, it makes the requirement of a middleman totally unnecessary. There is a close relationship between blockchain technology and smart contract as blockchain is a platform in which different smart contract applications thrive. ICO and smart contracts are also related concepts since smart contract is the technology utilised for selling tokens. Ethereum has remained the most popular of smart contracts.
There are several smart contract applications as well as different uses to which these smart contracts can be put. One of such is that it can be used for carrying out deliveries; a smart contract can be automated in such a way that money is transferred to a courier as soon as the parcel delivery is completed. It eliminates the need to sign any paperwork since all the sender is required to do is use crypto coins to fill smart contracts, whereby the contract then carries out every other process. Simply put, the smart contract is a code that helps execute what has been automated on the fulfilment of specific conditions. By doing so, transparency becomes a major characteristic of these transactions. In addition, the transactions are carried out faster. Smart contracts also have a strong resistance against fraud, it is irreversible while remaining decentralized. Asides delivery services, smart contracts can also be used for compressing business processes and fighting against unnecessary delays, automating payments of dividends, money exchange, monitoring personal data and keeping tab of inventories. This suggests that smart contracts can be used in various sectors: private and public; financial or health; real estate or media, and more.
However, as laudable and impressive as smart contracts are, there are still a number of issues such as security issues, legal issues and regulation issues.
It should be noted that the idea of smart contracts was first conceptualized over two decades ago, but its current position and utilization is a result of the influence of a blockchain which was invented about a decade ago. Experts have projected that as ‘Internet of Things Growing’, in which there will be an increase in need for smart contracts.