About smart contracts

Smart contracts, new technology, made possible by the emergence of public blockchains, difficult to understand, as this term is partially misleading regarding the nature described by the interaction.

Smart contracts are useful in the sense that it is a decentralized system that exists between all parties helps to avoid conflict between them and saves them time without having to pay the services of intermediaries. The block chain has its flaws, but they are absolutely transparent and, of course, superior to traditional systems in terms of speed, cost and safety – therefore, banks and governments are expressing concerning them such interest. Running on the block chain smart contracts has caused considerable information and response when their base was built fully Autonomous functioning of the organization. In addition, they allow you to build a self-regulating system of peer-to-peer insurance and facilitate the letting of any resource having an Internet connection. In this article I will explain how to work smart contracts. I will present a brief introduction on the topic, and then move on to the programming, storage and execution of smart contracts in Bitcoin and Ethereum, two of the most ambitious to date blockchain protocols without access levels. What are smart contracts?

Smart contracts, also known as cryptocontext, represent computer programs that directly control the transfer of digital currencies or assets between parties under certain conditions. Smart contracts are not just for fixing the rules and penalties for non-compliance, like ordinary treaties, but also automatically provide the implementation of those commitments. They do this, taking information as input, assigning it the introductory digital data values according to the laid down in the contract rules and fulfilling the required relevant clauses of the contract action, for example, determining whether to send an asset to one of the parties to the agreement or return it to the owner. The idea of smart contracts is easiest to explain by example. Let's imagine smart-contract of life insurance that pays the insured amount to the specific beneficiary in case of death of the policy holder. The contract can in real time to perform online verification of the registers records the death of citizens, to determine the time of payment of the sum insured. Smart contracts don't require trust, Autonomous and self-sufficient.
Storage and execution of smart contracts

Networks of Bitcoin and Ethereum storage and execution of smart contracts is different. Users write Ethereum smart contracts on the blockchain via a transaction in a network address, including necessary information to specify a sequence of executions of operations of a smart contract. The transaction is not sent to a particular address. Instead, the nodes (network nodes) that process the transaction, recognize the "package data smart contract", and generate for it an address on the network. The advantages of smart contracts

Smart contracts can offer many important advantages. Just going to list some of them:

Autonomy: Using smart contracts, you get the opportunity to securely make transactions without the need for the services of brokers, lawyers or other intermediaries. In particular, this eliminates the possibility of manipulation on the part of intermediaries, as the implementation of the agreement is controlled automatically by the network and not by one or several – perhaps biased – people. Trust: the Use of smart contracts will ensure that your documents are encrypted and stored in a distributed registry. There is no one who could tell you that he lost or somehow lost them.
Backup: Imagine that the Bank somehow lost your contribution. In the case of bacchanal, absolutely all network members have a copy of your data. Your data is duplicated many times. Security:Cryptography, encryption, web sites, ensure the safety of your data. The threat of hacking and data theft is eliminated. In fact, in order to crack this code and gain access to the data, the hacker would have to be truly superhuman smart.
Speed: Instead of having to spend time and resources on performing the paper works and manual document processing, smart contracts can use programming code to automate tasks, thus saving you from manual management of many business processes. Savings: smart contracts save your money by eliminating the need for any intermediaries. You will not have to pay the notary for the fact that he assured your transaction.
Accuracy: Automated contracts not only faster and cheaper but also help to avoid errors that occur from time to time when manually filling out many forms and reports. How smart contracts work?

It should be noted that Bitcoin first provided support for the basic smart contracts in the sense that his network may automatically transfer funds from one person to another. The nodes of the network only confirm the validity of the transaction if it meets certain conditions.

However, Bitcoin is limited to this usage scenario as currency. In contrast, Ethereum replaces the more limited scripting language (the language of about a hundred possible scenarios) a different language, which allows developers to write with it, own program.

The Ethereum allows developers to program their own smart contracts, or "Autonomous agents" as they are called in the white paper of Ethereum. Language Ethereum is "Turing-complete". This means that it supports a wider set of compute commands. Smart contracts have the potential to:

function as accounts with "multi-signature" – so that the funds will be debited only in case of confirmation of the transaction by a certain percentage of people with access to account management;
to monitor the implementation of agreements concluded between users – for example, the insurance contract and to provide the conditions for the implementation of other contracts (just as there are libraries of software modules);
to store information about the application – for example, information about the registration of a domain or a database of registered users. Source https://cryptocurrency.tech/o-smart-kontraktah/