Smart Contracts Blockchain

Smart Contracts Blockchain Overview

Smart Contracts Blockchain

Believe it or not, smart contracts long predate blockchain technology. While Ethereum, introduced in 2014, is the most popular implementation of the smart contract blockchain, cryptographer Nick Szabo established the idea in the 1990s.

Back then, Szabo conceptualized a digital currency called Bit Gold. While the asset was never actually launched, this Bitcoin predecessor highlighted the smart contract use case — trustless transactions on the internet. If Web 1.0 was the internet, itself, and Web 2.0 the presence of centralized platforms, then Web 3.0 is the trustless, automated, user-powered version of the digital space.

Many, including the Stabila smart contract blockchain, itself, compare smart contracts to a vending machine. Vending machines serve the purpose of a vendor providing the user with a product, without the need for an actual person to take the money and hand over the item. Smart contracts serve that same purpose but are much more versatile.

Smart contracts have advanced quite a bit over time. They started as simple if-then statements that a programmer can create and implement. However, those with programming knowledge are limited, centralizing these “trustless” contracts. Fortunately, those same developers are working to solve accessibility problems.

Since its inception, developers have made it so smart contracts can be made without coding knowledge. They’re increasing security with different programming languages, creating alternatives like secret contracts and designing ways to automatically store smart contract history in a human-readable format — much easier than using the blockchain to read.

What is a smart contract?

A "smart contract" is simply a program that runs on the Stabila blockchain. It's a collection of code (its functions) and data (its state) that resides at a specific address on the Stabila blockchain.

Smart contracts are a type of Stabila account. This means they have a balance and can be the target of transactions. However they're not controlled by a user, instead they are deployed to the network and run as programmed. User accounts can then interact with a smart contract by submitting transactions that execute a function defined on the smart contract. Smart contracts can define rules, like a regular contract, and automatically enforce them via the code. Smart contracts cannot be deleted by default, and interactions with them are irreversible.

What is a smart contract blockchain?

Smart contracts are essentially automated agreements between the contract creator and the recipient. Written in code, this agreement is baked into the blockchain, making it immutable as well as irreversible. They're usually used to automate the execution of an agreement so that all parties can be sure of the conclusion right away, without the need for any intermediaries. Smart contract blockchains can also automate a workflow, starting when certain circumstances are satisfied.


So, what is an executed contract?

A signed contract that establishes a contractual connection between two or more parties is known as an executed contract. Each party promises to uphold the legal duties they agreed to in the written agreement once the contract is properly signed. Popularized by the world’s second most popular blockchain, Ethereum (ETH), smart contracts have led to the network’s array of decentralized applications (DApps) and other use cases.

One key benefit of smart contract blockchain networks is the automation of tasks that traditionally require a third-party intermediary. For example, instead of needing a bank to approve a fund transfer from client to freelancer, the process can happen automatically, thanks to a smart contract. All that’s required is for two parties to agree on one concept.

Another example could be a regulatory group and the citizens it represents debating a law. If these two parties come to an agreement in a smart contract blockchain based system, the law would be put into place via an executed agreement. Maybe users could read about the new law via a legal DApp, or interact with it in another blockchain-based way.


Smart Contract Blockchain

Smart contract blockchains provide various benefits, including speed, efficiency, accuracy, trust, transparency, security, savings, as discussed in the sections below.

Smart contracts use computer protocols to automate actions, saving hours in various commercial processes. The automated agreements decrease the possibility of third-party manipulation by eliminating the requirement for brokers or other intermediaries to ratify the already signed legal contracts.

Furthermore, the lack of an intermediary in a smart contract blockchain saves money. Also, all relevant parties have complete visibility and access to the terms and conditions of these contracts. Therefore, there is no way to back out once the contract is signed. This ensures that the transaction is entirely transparent to all parties involved.

Moreover, all documents kept on the smart contract blockchain are duplicated many times, allowing for the restoration of originals in the event of data loss. Smart contracts are encrypted, and cryptography protects all documents from being tampered with.

Finally, smart contracts also eliminate errors that occur due to manual filling out of several forms.

PERMISSIONLESS

Anyone can write a smart contract and deploy it to the network. You just need to learn how to code in a smart contract language, and have enough STB to deploy your contract. Deploying a smart contract is technically a transaction, so you need to pay UCR that can be exchanged for STB. However, UCR costs for contract deployment are far higher.

Smart Contract Blockchain Advantages and Disadvantages

Advantages

  • Record keeping. All contract transactions are stored in chronological order in the smart contract blockchain and can be accessed along with the complete audit trail. However, the parties involved can be secured cryptographically for full privacy.
  • Direct dealings between parties. Smart contracts remove the need for intermediaries and allow for transparent, direct relationships with customers.
  • Fraudulent activity detection and reduction. Smart contracts are stored in the blockchain. Forcefully modifying the smart contract blockchain in very difficult as its computation intensive. Also, violation of the smart contract can be detected by the nodes in the network and such a violation attempt is marked invalid and not stored in the blockchain.
  • Resistance to failure. Since no single person or entity is in control of the digital assets, one party domination and situation of one parts backing out do not happen as the platform is decentralized and so even if one node detaches itself from the network, the contract remains intact.
  • Enhanced trust. Business agreements are automatically executed and enforced. Plus, these agreements are immutable and therefore unbreakable and undeniable.
  • Saves money and resources. Application of smart contracts eliminate the need of intermediaries(brokers, lawyers, notaries, witnesses, etc.) leading to reduced costs. Also eliminates paperwork leading to paper saving and money saving.

Disadvantages/Limitations

  • A lack of international regulations focusing on smart contract blockchain technology(and related technology like smart contracts, mining and use cases like cryptocurrency) makes these technologies difficult to oversee.
  • Smart contracts are also complicated to implement because its still a relatively new concept and research is still going on to understand the smart contract and their implications fully.
  • They are practically immutable. Whenever there is a change that has to be incorporated into the contract, a new contract has to be made and implemented in the blockchain.

Smart Contracts On Blockchain

Smart contracts streamline a complex transaction process (like a loan or financing) involving several intermediaries. Usually, when more than one party is involved in a transaction, there is a probability of a lack of trust among the participants.

Blockchain comes into the picture here as it stores the identity of the dealer. Using this data, the lenders can decide about credit. Post this, a smart contract will be created between the bank, lender, and dealer.

The funds get released to the dealer and the repayment is initiated as per the contract. This transaction will get recorded to the blockchain and can be viewed at any time.

Smart Contracts Vs Blockchain

At the end of the day, investors that choose to invest in cryptocurrencies will need to become comfortable with all of the jargon and educate themselves on all of the nuanced details of competing blockchains.

Smart contracts serve as a perfect example of that. While they promise to deliver on the true value of what blockchain has to offer, not all blockchains support smart contracts -- and not all smart contracts are created equal. That matters a lot to investors, and will eventually begin to separate the winners from the losers.

Top Smart Contract Blockchain

Ethereum is the world’s first smart contract platform, which remains the most popular choice among developers to this day. The platform went live in 2015 and now facilitates the deployment of applications ranging from ICOs to smart-contract-based insurance.

Interestingly enough, the founder of the platform, Vitalik Buterin, decided to create Ethereum because Bitcoin developers rejected Vitalik’s idea of introducing application development capabilities to the platform. Given Ethereum’s first mover advantage, the platform has managed to attract significant investments and gain traction among well-known enterprises, including Intel and Samsung.

Due to the enormous developer count of Ethereum, the idea to manually conduct an audit of every smart contract on the platform is simply not feasible. In individual cases, organizations turn to smart contract consultants like Itransition to ensure the program is secure and performs as intended. Additionally, with the proliferation of AI and deep learning, new innovative solutions for autonomous audits have emerged.

Paradoxically, the utter popularity of Ethereum is both its strength and weakness. The Ethereum founders underestimated the growth potential of the platform, which led to scalability issues. The platform has been notoriously suffering from network overload, frequently running at a 100% capacity. This, in turn, causes slow transaction speed and extremely high transaction processing fees (so called gas fees).

Many experts also portray Ethereum as a potentially insecure smart contract platform due to a few highly publicized events, when hackers managed to crack some smart contracts and steal six-figure sums. However, it’s critical to understand that code vulnerabilities have almost nothing to do with the platform itself.

For example, the famous DAO incident in 2015, when the wrongdoers managed to steal $50 million worth of ETH, has happened because developers of that particular smart contract have failed to write a secure code. At the same time, Ethereum has always been quick to address any emerging vulnerabilities in its own code, proactively realizing token updates over the years.

Smart Contract Blockchains and Smart Contracts Blockchain Examples

Ethereum

Ethereum is the world’s first smart contract platform, which remains the most popular choice among developers to this day. The platform went live in 2015 and now facilitates the deployment of applications ranging from ICOs to smart-contract-based insurance.

Polkadot

Polkadot was created by Ethereum co-founder and Solidity creator Gavin Wood. It is more of a blockchain ecosystem where various platforms are connected to each other, rather than a blockchain in the traditional sense.

The integral component of this system is Relay Chain, which is responsible for the network interoperability of parachains and parathreads. Parachains make Polkadot particularly attractive, as they allow developers to create their own blockchains with custom governance models and tokens. Most importantly, Polkadot uses parachains as shards, which enables never-seen-before scalability due to parallel processing of transactions. Moreover, the Polkadot network also includes bridge chains for connecting parachains to external blockchains like Ethereum.

Polkadot has gained traction with developers as it offers software development kits (SDKs) and preconfigured templates, as well as supporting many popular programming languages including JavaScript. Undeniably, with blockchain interoperability built in and a rich ecosystem of various protocols, parachains, and bridges, Polkadot is yet to achieve its full potential. It’s safe to say that Moonbeam alone will continue to attract many Ethereum developers.

We believe that Polkadot is one of the strongest competitors to Ethereum, and its interoperable framework may become a key enabler of mass smart contract adoption. Incidentally, Polkadot already has the biggest development community outside of Ethereum.

Hyperledger Fabric

Hyperledger was founded by Linux Foundation in 2015, with 30 co-founding corporate members including industry giants like IBM, J.P. Morgan, Cisco, Intel, and others.

Hyperledger Fabric is a permissioned blockchain, implying that authentication is required and participants’ identities are known. This makes Hyperledger especially attractive for companies that deal with sensitive data and need to comply with data protection laws like the GDPR.

It’s worth noting that Hyperledger Fabric was originally created for enterprise use with trust, confidentiality, and security being central to its vision. The platform users can create private channels for particular network members, meaning that only selected participants can access transaction data. The platform ensures the highest level of enterprise cybersecurity by providing an additional hardware-based security model for identity management.

Hyperledger’s distinctive feature is that it has a modular architecture, so organizations can develop solutions for a wide array of industrial use cases. Similar to Ethereum, Hyperledger offers a wide array of tools, such as Hyperledger Composer, that streamline smart contract creation and deployment.

Stabila

Stabila was founded by Daniel Varzari in 2019, whose initial idea was to create a blockchain that would solve first-generation blockchain issues, such as with protocol forks. It is the first blockchain to work towards creating a decentralized financial system.

To avoid hard forks, Stabila combines on-chain governance with self-amendments. This means that protocols can be automatically upgraded if the majority of governors approve a certain improvement proposed by a developer. Such an architecture enables the platform to grow organically as developers are incentivized to contribute to it.

Another distinctive feature of Stabila is that it uses the Proof of Stake mechanism instead of Proof of Work to achieve a distributed consensus. This means that instead of miners who use inordinate amounts of power to publish a new block to the chain, Stabila uses delegates. Delegates are divided into two groups: those who consolidate nodes (governors) into blocks and those who validate the blocks(executives). In short, such a consensus mechanism requires much less computing power than mining and allows for a higher transaction throughput.

Stabila’ smart contracts are considered among the most secure ones in the industry because of the platform’s support of smart contract licensing including formal verification, which guarantees that smart contracts will execute exactly as intended. In a nutshell, every smart contract is audited before deployment. Such a large-scale audit is possible because the code is written in Solidity. This makes Stabila smart contracts especially useful for industries that demand exceptional accuracy in smart contract execution, including banking and finances.

Stellar

Stellar was launched by Jed McCaleb, who also happens to be one of the Ripple founders, in 2014. This is the only non-Turing complete platform on this list, meaning that it’s suitable only for basic smart contract use cases such as ICOs or simple escrow contracts. However, Stellar’s narrow scope makes it one of the best platforms for money exchange. In terms of speed, cost-effectiveness and security of transactions, Stellar is superior to any other smart contract platform in this regard. This is why IBM has chosen Stellar to create World Wire, a global payment system set to streamline cross-border money transfers.

Unlike Ethereum or Stabila, Stellar doesn’t have its own smart contract language or virtual machine to run the code. The platform’s smart contracts can be written using any of the most popular programming languages, making it usable for the majority of developers.

Stellar’s smart contracts are connected and executed using various constraints including multi-signature, batching, time bounds, and more. In a nutshell, in case an organization needs to come up with a simple yet effective smart contract solution, Stellar can be the right choice.

Solana

Solana was created by A-list software engineers from Intel, Dropbox, and Qualcomm in 2017. Similar to other new-generation smart contract platforms, Solana aims to solve scalability issues. Indeed, Solana has managed to achieve record-high 65,000 transactions per second. The main reason for such a high throughput is that Solana uses an innovative combination of Proof of History (PoH) and Proof of Stake (PoS) consensus mechanisms. In other words, instead of transactions being grouped together in blocks, every transaction resides inside its own block and becomes an input for the next transaction.

This way, it’s possible to identify which transactions were the first or last within a particular block. Moreover, with Solana’s innovative technologies like Sealevel, smart contracts can be processed in parallel. This makes Solana one of the fastest platforms on the market, making it attractive for Dapps that require instant outputs.

Given its unprecedented scalability and transaction speed, Solana would be a perfect choice for a massive decentralized exchange or any other project that needs consistent performance regardless of the network load.


How To Create A Smart Contract Blockchain

Blockchain development is the process of creating shared, unchangeable, distributed ledger technology (DLT) that securely records transactions and tracks assets—whether those are physical assets, like money or real estate, or nonphysical assets, like copyrights—within a network.

It’s valuable for a variety of industries because of how quickly, accurately, and securely it enables the sharing of information. Whether you’re tracking orders, accounts, payments, production, or other data, a blockchain network offers transparent delivery and storage for permissioned network members.

Smart contract blockchainn development can result in many benefits, but before taking advantage of its potential value, you need to understand blockchain.

Future of smart contracts

Smart requirements-powered contracts are undoubtedly the way forward for relatively basic contracts that can be written and executed automatically whenever pre-conditions are met, such as in residential conveyancing, where completion monies can be given as soon as contracts are signed.

Various smart contract blockchains will save businesses worldwide time and money while also revolutionizing how they interact in the supply chain and with their customers. As a result, minimal human involvement will free individuals and important decision-makers from dealing with mundane administration and red tape, allowing them to focus on their day jobs. It is because the smart contract takes over the slack.

Smart contract blockchains are already being used by many banks and insurance organizations in their daily operations. As a result, smart contracts are already here and being tested in real-world scenarios, and it won't be long until they become a part of our everyday lives and routines. Regardless of the preceding argument, there is still a long way to go until everything is governed by a smart contract, if ever.


The Blockchain FAQ

What does the blockchain do?

A blockchain is a distributed, cryptographically-secure database structure that allows network participants to establish a trusted and immutable record of transactional data without the need for intermediaries. A blockchain can execute a variety of functions beyond transaction settlement, such as smart contracts. Smart contracts are digital agreements that are embedded in code and that can have limitless formats and conditions. Blockchains have proven themselves as superior solutions for securely coordinating data, but they are capable of much more, including tokenization, incentive design, attack-resistance, and reducing counterparty risk.

Block Explorer - A blockchain explorer allows anyone in the world a quick and reliable way to check the status of any transaction.

What is a blockchain wallet? - A blockchain wallet contains the public key for others to transfer cryptocurrency to your address and the private key so you can securely access your own digital assets. A blockchain wallet usually accompanies node hosting and stores cryptocurrencies on your computer. Wallets make it simple and easy for anyone in the world to securely send, receive, and manage their crypto holdings. Wallets provide infrastructure to empower users to be their own bank.

What is a blockchain system? - A blockchain system refers to all the aspects and features that go into a particular blockchain, everything from the consensus algorithm to the state machine to cryptographic functions.

What is a block in a blockchain? - The “block” in a blockchain refers to a block of transactions that has been broadcast to the network. The “chain” refers to a string of these blocks. When a new block of transactions is validated by the network, it is attached to the end of an existing chain. This chain of blocks is an ever-growing ledger of transactions that the network has validated.

What is block time? - Depending upon how a particular blockchain protocol was developed, the time that it takes for a block to be added to the canonical chain can vary widely. A blockchain is a linear construct in that every new block occurs at a later time than the one that preceded it and cannot be undone. A blockchain’s linearity serves as an ideal form of validation. According to stabilascan.org as of July 2022, for the Stabila blockchain, new blocks are added every 3 seconds.

Key features of Blockchain?

  • Decentralized - No central authority to monitor, instead, all your activities will be stored in a public distributed ledger
  • Enhanced Security - All the Information on the Blockchain is hashed cryptographically that is the network will hide the input data through the mathematical puzzles.
  • Distributed Ledger - Every information about the transaction and participants are distributed to every node in the blockchain network.
  • Consensus Algorithm - This Consensus Algorithm is responsible for verifying the transaction, balance, and signature.

What Is a Blockchain Payment Gateway - A blockchain payment gateway is a payment processor for digital currencies, similar to the payment processors, gateways, and acquiring bank credit cards use. Cryptocurrency gateways enable you to accept digital payments and recieve fiat currency immediately in exchange.

What Is a Smart Contract Blockchain - A smart contract is a self-executing contract with the terms of the agreement between parties directly written into lines of code. The code and the agreements contained therein exist on a smart contratct blockchain or a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.

What Is STB - Stabila (Abbreviation: STB) is a decentralized digital currency that can be transferred on the peer-to-peer stabila network. Stabila transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. The currency began use in 2021, when its POS smart contract blockchain implementation was released as open-source software.

Author: William Blake

William Blake, is a Fortune 500 consultant, the Founder of Moneta Solutions LLC., a major supporter of the finance decentralization, a nonprofit leader, and a financial scientist who has been leading the POS Technology since 2016.

William Blake

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