What is a smart contract?
Smart contract is a digital algorithm, dedicated to form, control or give information about a file. Smart contracts use algebraic algorithms, which means that all conditions should be met in order to automatically conduct a transaction. In other words, if smart contract criteria are not met, the transaction cannot be conducted, and the results of meeting criteria of smart contracts are controlled by multiple network nodes.
History of smart contracts.
Nick Szabo is an american computer scientist, known for his research in smart contracts and digital currency. In 1996 he developed the concept and phrase “smart contract” for enforcing developed methods of contract law in the e-commerce sector. Smart contracts were first used in 2008, when the first blockchain structures were introduced and became more popular after Ethereum launching, because the platform was based on creating decentralised blockchain online services.
A basic idea of how smart contracts work.
- The parties call on a smart contract to make a deal.
- Data is transmitted to the blockchain, where it’s checked and verified.
- All relevant information is placed in a block, which combines all messages, that are relevant to the deal.
- The block takes its place in the blockchain.
- Smart contract is deemed to be satisfied.
Pros and cons of smart contracts.
One of the key advantages of a smart contract is it’s protection of unauthorised tampering. The smart contract ensures transparency and security, both parties can track the entire process execution and moreover, if part of the contract is not executed, the entire contract will not be executed.
But despite the advantages listed above, there are also disadvantages in them. The most obvious is that smart contracts are not a subject to legal regulation (at least in Russia). On top of that, the creation of a smart contract is quite difficult, there is a chance that you won’t understand the process and will require help from an IT specialist. For inattentive users, who easily lose keys and passwords from their accounts, the vulnerability may lead to a failure.
Smart contracts in Free TON.
For Free TON smart contracts are the essential part of blockchain technology, because users constantly carry out transactions (this way all the wallets are smart contracts, sort of). Smart contracts are also essential for partnerships, holding competitions etc. There was a workshop created for developers, who were not familiar with creating smart contracts, because with dedication and will to learn, everyone can handle this.
It’s also important to notice that all interactions between smart contracts on the Free TON platform are asynchronous.
Systemic smart contracts of Free TON:
- Validator Chooser - allows us to choose from validators.
- Referral Giver - a wallet for funding new members.
- Validator Giver - a wallet for funding validators.
- Developer Giver - a wallet for funding developers.
The amount of users who will want to create a smart contract will grow as the Free TON platform will expand and interact with more crypto platforms.
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