Smart contracts represent a pivotal innovation within the blockchain sphere. Initially conceptualized in the 1990s, they serve as a digital protocol to execute contractual agreements. Essentially, smart contracts are coded containers that digitally mirror the stipulations of tangible contracts. These contracts are, at their core, legally enforceable commitments made between two or more entities, each bound to honor their obligations. Crucially, such agreements require legal enforceability, typically through a centralized authoritative entity.
However, smart contracts eliminate the need for intermediaries traditionally trusted to facilitate agreements between parties. They leverage code that is autonomously distributed and verified across the nodes of a decentralized blockchain network. Furthermore, they enable transactions between parties who may not trust each other, without the need for direct interaction, reliance on intermediaries, or the associated costs of middlemen.
When juxtaposed with traditional contracts, smart contracts provide several advantages: they lower the risk associated with transactions, cut down on administrative and service expenses, and boost the efficiency of business operations. This is largely due to their integration into and protection by the blockchain. In light of these attributes, smart contracts are anticipated to offer a more effective alternative to current transactional frameworks across various industries.
Smart Contracts’ Platforms
Skilled blockchain developers play a crucial role in guiding clients to select the most suitable blockchain platform and strategy for crafting and implementing smart contracts tailored to their organizational requirements. Various blockchain infrastructures support the creation and execution of smart contracts, including Ethereum, Hyperledger Fabric, NEM, STELLAR, Waves, and Corda. Bitcoin is infrequently cited in discussions of smart contracts due to its limited scripting capabilities and prioritization of security over programmability, rendering it incapable of handling intricate smart contracts. Moreover, even simple contracts on the Bitcoin network are challenging to compose and costly to execute.
When it comes to developing smart contracts, diverse platforms offer distinct features, such as varying levels of security, execution of contract code, and programming languages for contracts. Certain platforms permit the crafting of smart contracts using advanced programming languages. A compiled Table 1 presents an overview of the strengths and weaknesses associated with different platforms.
The Advantages of Smart Contracts:
- Saving: Smart contracts streamline the transaction process by removing the delays and financial burdens typically associated with intermediaries. By leveraging blockchain technology, a healthcare ecosystem can be created, aiding various participants in the medical system to deliver enhanced healthcare services at reduced expenses.
- Security: The encryption of transaction records on the blockchain renders them highly resistant to hacking. Furthermore, the nature of a distributed ledger necessitates altering the entire chain to modify just one record. The development of an EdgeChain model has demonstrated the security benefits of utilizing smart contracts and blockchain technology, all while maintaining reasonable costs.
- Confidence and openness: The concern of data alteration for malicious reasons is mitigated by the absence of intermediaries and the secure exchange of encrypted transaction records. Blockchain-based smart contracts offer a novel technical approach to preventing data tampering, providing an unalterable log of transaction history, and acting as reliable overseers.
- Accuracy, efficiency, and rapidity: Upon the fulfillment of a specified condition, smart contracts are executed immediately, eliminating the need for paperwork and the potential for errors common in manual documentation. A system has been developed where sensors communicate with a smart device that carries out smart contracts and records all events on a private blockchain. This setup facilitates real-time patient monitoring by sending notifications to both patients and healthcare professionals while securely documenting the initiators of these actions.
