The next generation of blockchain platforms or just a hype - original article by The onecoin Team
One of the smart contract definitions can be traced back to late 1990s, when Nick Szabo referred to them as “self-automated computer programs that can carry out the terms of any contract”. When the blockchain technology was introduced in 2009, the first blockchain solution was designed to perform a small set of simple operations in order to provide efficiencies and intangible technological benefits, making it possible for users to make peer-to-peer transfers based on trust.
Further developments of this technology explored the powerful side of blockchains and its capability to perform much more complex operations. Blockchain applications developed by businesses have the capacity to become one of the key pillars of the next generation blockchain technology.
Lately smart contracts have become a hype theme but Ethereum’s description has proved to be the most popular among companies looking to adopt the blockchain-based solution. In the sense of general purpose computation that takes place on the blockchain, smart contracts have been described in Ethereum’s white paper as “cryptographic boxes that contain value”: “...Ethereum does this by building what is essentially the ultimate abstract foundation layer: a blockchain with a built-in Turing-complete programming language, allowing anyone to write smart contracts and decentralized applications where they can create their own arbitrary rules for ownership, transaction formats and state transition functions… Smart contracts, cryptographic "boxes" that contain value and only unlock it if certain conditions are met, can also be built on top of the platform, with vastly more power than that offered by Bitcoin scripting because of the added powers of Turing-completeness, value-awareness, blockchain-awareness and state.
Essentially, smart contract financial applications are developed for banks and financial institutions, which focus their efforts on developing solutions that run on private and permissioned blockchains with limited set of users. The reason is that in reality the issuers have to be trustworthy and in some cases the banking infrastructure is not suited to implement other than centralized blockchain solutions. What is more, private blockchains are more suited for customized solutions expressing business logic and the relevant events that trigger it, including using digital signatures proving those messages and recording them on the blockchain.
The applications of smart contracts can be financial, semi-financial or applications with no financial characteristics. Financial applications can be developed so that they offer better suited ways to users to manage and enter into contracts, when using their money, including savings wallets, wills, hedging contracts, sub-currencies, financial derivatives, etc. Among them financial derivatives are the most used and simplest applications. The main issue is the way financial contracts will be implemented, since most of those require a reference to an external price ticker.
Another highly potential application of financial contracts is cryptocurrency commerce, where smart contracts offer a potential solution to their volatility by presenting a solution via issuer-backed assets like sub-currency. The advantage of sub-currencies is that the issuer has the option to issue and revoke units, as well as to provide a unit of the currency to anyone able to present a unit of a specified underlying asset like gold or any fiat currency offline.
Semi-financial applications have both monetary and non-monetary part and are used as self-enforcing bounties for solutions to computational problems. The third type has no financial characteristics and can be used for online voting and decentralized governance. Further applications of smart contracts are in cloud computing, savings wallets, crop insurance, prediction markets and more.
No comments:
Post a Comment