SMART CONTRACTS DEVELOPMENT

“Smart contracts are digital contracts that are self-executing in nature. The clauses in the contract are encoded into a block and upon satisfying the clauses, the party is paid the promised money.“
Intellibeans is your key to provide hassle free Smart Contract Development.
Contracts are the pivot around which businesses around the world run. Smart contract development is a discovery that has revolutionized the way contracts are being executed today.

Smart contracts are the digital protocols created for validating conditions of a legal contract between two or more parties. Smart contracts eliminate the need for human management and significantly reduce risk. Advancements in the technology mean that contracts can be coded to communicate with each other, exchange vital information, reflect what influences them, and stay updated with the most current information. With the usage of smart contracts, the businesses become faster and more flexible offering the ability to learn from past contracts. Smart contracts also provide an understanding of the risk-taking capacity of the organization and creating adaptable contracts that change with underlying assets. They are triggered automatically at an event; more than one copy of data is stored at different ledgers. Smart contracts are transparent, accurate, faster and secured.

Now, unless you have been living under a rock, you would have heard of BlockChain Technology. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. It is an open distributed ledger that can record transaction between two parties efficiently in a verifiable and permanent way.

Managed by peer to peer network, they adhere to a protocol for inter-node communication and to validate new blocks.

Though initially blockchains were seen as public distribution ledger for the cryptocurrency, the release of ethereum in 2015 enabled the execution of the very first smart contract.

Smart contracts allow the performances of credible transactions without middlemen.

NOW, HOW DO YOU EXECUTE A SMART CONTRACT?

Parties involved are anonymous in this system and The contract between them is written as code into blockchain. The smart contract keeps track of each and every term of the agreement and enables every step towards its fulfilment. The contact cannot be altered at any cost by either of the parties. Once the terms are fulfilled, then the pre-agreed payment is done as per the contract.

LET US SEE AN ILLUSTRATION OF HOW A SMART CONTRACT IS EXECUTED.

X has an apartment to be rented out in London and Y is hunting for a place to live in the city. Conventionally, they would hire a third party, i.e, a real estate agent, to meet their respective needs. The agent would definitely take up responsibility for the compliance of the agreed terms and would even charge a fee for his services. But the catch in here is that he cannot guarantee the fulfillment of the terms.

Now, in the scenario of smart contract, the following events would unfold.
An independent storage would be created by X and Y in the blockchain.

Y would put the rent mentioned in the contract in the storage

X would place the address of the apartment and the access code to the door of the apartment in the storage.

X would get payment confirmation and Y would get the address and access code.

A smart contract is immutable, hence X and Y cannot cheat nor can they change the terms in the contract.

Now the aforesaid events can lead to three scenarios.

Case 1: Y comes to the city and find the address and access code given by X are right. X receives the payment agreed upon earlier

Case 2: Y comes to the city to find the address and access codes given by X are phony. Y receives the advance rent payment he made.

Case 3: Y doesn’t come to the city. In this case, X receives some fraction of the advance rent as compensation, as per terms in the contract and rest is refunded to Y.

The contract will be termed fulfilled and will remain in the blockchain.

Advantages of Smart Contracts includes
  • They are quick and reliable.
  • They are immutable.
  • The execution is decentralized that makes them failure proof.
  • Neither parties can cheat or tamper the contract.
  • Automatic execution guarantees fair business.

The flip side of the coin is that the codes are written by human and they can be as good as the people who write them. Code bugs and oversights can creep in and there would be no preventive mechanism to prevent exploitation in such cases.

ANY FORETHOUGHT ON EXECUTING A CONTRACT WITHOUT MANIPULATIONS, SETBACKS AND MEDDLING OF THIRD PARTIES? OUR TEAM OF EXPERTS CAN GUIDE YOU IN DEVELOPING IT AND FURTHER AUDITING. CONTACT INTELLIBEANS TODAY!

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