What is smart contract?
In English the phrase smart contract is translated as "smart contract". This is a special kind of computer algorithm, which gives a possibility to conclude and support contracts of self-executing type. Typically, these operations are performed in Blockchain.
Programming of smart contracts implies their entry in the form of a special code that is listed in the registry. Computer programs operate it, so you can perform all basic operations with contracts, without finding a mediator and not paying for his services.
The main advantage of smart contracts
Development of smart contracts gave the opportunity to conduct any transaction without the help of agents who work in banking institutions or authorities. Each operation can be traced, so such manipulation is completely transparent.
Thanks to smart contracts you can find out the established penalties, which are accompanied by violation of the basic obligations of the parties. Implementation of each clause in the automatic mode enables users to avoid the various problems and errors.
The history of smart contracts emergence
Creating of smart contract related to the technical progress development. In 1994 Nick Sabo first developed the idea of creating a smart contract. What previously was a smart contract? In simple words - it was a computer protocol, which conducted and controlled the transactions by using mathematical algorithms.
Sabo's ideas were first performed when appeared the first crypto currency named Bitcoin. It was based on a special technology of Blockchain. The creator laid the foundation of the basic principles of smart contracts in Bitcoin protocols. But modern Blockchain do not possess the fullness of the Turing. That is why such "contracts" are overly simple constructs. For example, this is transaction with deferred executor or multi-signature.
Etherium smart contracts are more current version of the contracts, which have received a wide practical application. In 2013 Vitalik Buterin made conclusions that it is inappropriate to use Bitcoin as a core protocol. Crypto currency was originally created for other tasks. That is why Buterin decided to develop the best protocol for smart contracts from scratch.
Features of smart contracts and its basic elements
Smart contracts are written in Blockchain. The basic logical chains of operations are placed in a special unit that represents a software container. It arranges the messages related to a specific smart contract. These messages serve as inputs and outputs of the special code and lead to the implementation of operations in all conditions.