Smart contracts are programs (files of code) that are uploaded to a blockchain or other decentralized network instead of a centralized server. This new type of program can’t be altered. It sits waiting for interactions or conditions to be met.
In this article, I’ll teach you why this distributed computing is fueling many digital revolutions. At the end, I hope to spark some innovative ideas in you.
What’s So Amazing and Different about Smart Contracts?
Because smart contracts live on a blockchain or other decentralized network, they are “immutable”. This means they can’t be changed once they are live on the network. The nodes / servers that run the decentralized network share rules of keeping a common history of the code on the network and prevent it from being changed.
Immutability is the revolutionary feature that makes smart contracts a new type of program which allows new possibilities. Since they can’t be changed, it allows for people to access them in a “trustless” way. We don’t need to rely on trusting a centralized server or company for programs any longer. The code can’t be changed to steal funds or change votes.
The decentralized network acts as the server (backend) from which apps / DApps can talk to them. You will often see this term “decentralized apps” (DApps) that refer to apps that interact with the smart contract code on these networks. The most popular platform for DApps is Ethereum, using the Solidity programming language but there are hundreds of others.
Other Smart Contract Languages
Of course, Ethereum and its Solidity language are not the only names in the smart contract game. Other blockchains have their own unique languages. Some are using a new tech called WebAssembly. WebAssembly allows many coding languages to be interpreted by the browser. These include Python, Rust, C, C++, Rust, and many others. The ability for developers to build smart contracts expands with these innovations.
Because we know the smart contract can’t be changed, we can use these programs for a variety of new uses.
Possible Uses for Smart Contracts
Since smart contracts sit on a decentralized network waiting to execute, they offer a host of new use cases that have not existed before.
For one, all steps insupply chains can be improved. Delivery and tracking can be improved with transparent ledgers. Smart contracts can automatically trigger payments too.
A smart contract programs waits for certain conditions to be met without a middleman authortiy. Many legal contracts or transfer of ownership can be tracked and executed. The challenge is communicating and feeding real world actions into the smart contracts.
Because encryption and cryptography is heavily used in decentralized networks, healthcare is also experimenting with smart contracts and DApps. Encrypted health records can be accessed wherever a patient is being seen, supplies can be better tracked, and insurance can be automated.
All types of voting can be improved for elections, cooperatives, and other governance. Fraud can be reduced. Votes can be automatically counted and IDs can be verified.
There are endless uses for smart contracts that don’t exist today. Decentralized networks will continue to expand into nearly every industry in the world. It is all branching off the simple revolution of programs that can’t be changed. The space is wide open for you to create something new!