Smart Contracts

Smart Contracts

1. What is a Smart Contract?

What is a Smart Contract?

A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.

Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman.

The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account. More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations. If you are looking for a more detailed walkthrough of smart contracts please check out our blockchain courses on smart contracts.

Example

Suppose you rent an apartment from me. You can do this through the blockchain by paying in cryptocurrency. You get a receipt which is held in our virtual contract; I give you the digital entry key which comes to you by a specified date. If the key doesn’t come on time, the blockchain releases a refund. If I send the key before the rental date, the function holds it releasing both the fee and key to you and me respectively when the date arrives.

The system works on the If-Then premise and is witnessed by hundreds of people, so you can expect a faultless delivery. If I give you the key, I’m sure to be paid. If you send a certain amount in bitcoins, you receive the key. The document is automatically canceled after the time, and the code cannot be interfered with either of us without the other knowing since all participants are simultaneously alerted.

You can use smart contracts for all sorts of situations that range from financial derivatives to insurance premiums, breach contracts, property law, credit enforcement, financial services, legal processes, and crowdfunding agreements.

2. What is Ethereum & ERC-20 Tokens?

What is Ethereum & ERC-20 Tokens?

Ethereum (Ether) is an open blockchain platform made to run decentralized applications (smart contracts) worldwide. With fast and low-cost transactions.

ERC-20 Tokens ERC-20 is a standard that implements a token interface. That allow to store, receive and transfer units of value (tokens). A token can be a cryptocurrency a certificate of property or any representation of value.

3. What Can I Use Smart Contracts For?

What Can I Use Smart Contracts For?

Government
Insiders vouch that it is extremely hard for our voting system to be rigged, but nonetheless, smart contracts would allay all concerns by providing an infinitely more secure system. Ledger-protected votes would need to be decoded and require excessive computing power to access. No one has that much computing power, so it would need God to hack the system! Secondly, smart contracts could hike low voter turnout. Much of the inertia comes from a fumbling system that includes lining up, showing your identity, and completing forms. With smart contracts, volunteers can transfer voting online and millennials will turn out en masse to vote for their Potus.

Management
The blockchain not only provides a single ledger as a source of trust, but also shaves possible snarls in communication and workflow because of its accuracy, transparency, and automated system. Ordinarily, business operations have to endure a back-and-forth, while waiting for approvals and for internal or external issues to sort themselves out. A blockchain ledger streamlines this. It also cuts out discrepancies that typically occur with independent processing and that may lead to costly lawsuits and settlement delays.

Case history:
In 2015, the Depository Trust & Clearing Corp. (DTCC) used a blockchain ledger to process more than $1.5 quadrillion worth of securities, representing 345 million transactions.

Supply Chain
Smart contracts work on the If-Then premise so, to put in Jeff Garzik’s words,
“UPS can execute contracts that say, ‘If I receive cash on delivery at this location in a developing, emerging market, then this other [product], many, many links up the supply chain, will trigger a supplier creating a new item since the existing item was just delivered in that developing market.’” All too often, supply chains are hampered by paper-based systems, where forms have to pass through numerous channels for approval, which increases exposure to loss and fraud. The blockchain nullifies this by providing a secure, accessible digital version to all parties on the chain and automates tasks and payment.

Case history:
Barclays Corporate Bank uses smart contracts to log a change of ownership and automatically transfer payments to other financial institutions upon arrival

Automobile
There’s no doubt that we’re progressing from slothful pre-human vertebrates to super-smart robots. Think of a future where everything is automated. Google’s getting there with smartphones, smart glasses, and even smart cars. That’s where smart contracts help. One example is the self-autonomous or self-parking vehicles, where smart contracts could put into play a sort of ‘oracle’ that could detect who was at fault in a crash; the sensor or the driver, as well as countless other variables. Using smart contracts, an automobile insurance company could charge rates differently based on where, and under which, conditions customers are operating their vehicles.

Real Estate
You can get more money through smart contracts. Ordinarily, if you wanted to rent your apartment to someone, you’d need to pay a middleman such as Craigslist or a newspaper to advertise and then again you’d need to pay someone to confirm that the person paid rent and followed through. The ledger cuts your costs. All you do is pay via bitcoin and encode your contract on the ledger. Everyone sees, and you accomplish automatic fulfillment. Brokers, real estate agents, hard money lenders, and anyone associated with the property game can profit.

Healthcare
Personal health records could be encoded and stored on the blockchain with a private key which would grant access only to specific individuals. The same strategy could be used to ensure that research is conducted via HIPAA laws (in a secure and confidential way). Receipts of surgeries could be stored on a blockchain and automatically sent to insurance providers as proof-of-delivery. The ledger, too, could be used for general healthcare management, such as supervising drugs, regulation compliance, testing results, and managing healthcare supplies.

4. What Can Smart Contracts Give Me?

What Can Smart Contracts Give Me?

Autonomy – You’re the one making the agreement; there’s no need to rely on a broker, lawyer or other intermediaries to confirm. Incidentally, this also knocks out the danger of manipulation by a third party, since execution is managed automatically by the network, rather than by one or more, possibly biased, individuals who may err.

Trust – Your documents are encrypted on a shared ledger. There’s no way that someone can say they lost it.

Backup – Imagine if your bank lost your savings account. On the blockchain, each and every one of your friends have your back. Your documents are duplicated many times over.

Safety – Cryptography, the encryption of websites, keeps your documents safe. There is no hacking. In fact, it would take an abnormally smart hacker to crack the code and infiltrate.

Speed – You’d ordinarily have to spend chunks of time and paperwork to manually process documents. Smart contracts use software code to automate tasks, thereby shaving hours off a range of business processes.

Savings – Smart contracts save you money since they knock out the presence of an intermediary. You would, for instance, have to pay a notary to witness your transaction.

Accuracy – Automated contracts are not only faster and cheaper but also avoid the errors that come from manually filling out heaps of forms.

5. Is It Really FREE?

Is It Really FREE?

Deploying Smart Contracts to any network is free, however, you will need some Ether to pay for the gas transactions. *Click here for Gas Fee Rates

6. What are the Minimum Requirements to Build a Smart Contract?

What are the Minimum Requirements to Build a Smart Contract?

You only need a Browser compatible with Metamask (Chrome, Mozilla and Brave at the moment) and the extension or add-on properly installed.

Metamask is FREE to Install.

7. What Types of Smart Contracts Can I Build?

What Types of Smart Contracts Can I Build?

The types of Smart Contracts you can build with our platform are:

A. Cryptocurrencies (Coins)
B. Crowd Funding
C. Initial Coin Offerins (ICO)

A. Cryptocurrencies (Coins):
1. A standard ERC-20 token implementation focused on gas saving, meaning that the users of your token will spend the minimum amount of ether in each transaction. This is recommended for personal or small projects.

2. A standard ERC-20 token implementation focused on security. This implementation improves the security of the smart contract, considering edge cases. This is recommended for public, valuable or sensitive tokens.

3. A standard Pistachio ERC-20 token implementation, so this is also focused on security, but also it has some advanced features for token management like ability to burn or mint tokens and pause/resume token activity.

B. Crowd Funding
1. A simple crowdfunding campaign that can receive contributions in Ether. The owner can spend the donations only on contributors approval.

C. Initial Coin Offerins (ICO)
1. A basic ICO that can receive contributions directly with a transfer in Ether or using a GUI with Metamask.

2. An advanced crowdsale to create Initial Coin Offerings that can receive contributions directly with a transfer in Ether or using a GUI with Metamask, plus optional features like a hard capped limit and opening and closing times.

8. Is Ethereum Safe & Secure?

Is Ethereum Safe & Secure? Ethereum is the leader in smart contracts platforms and is really strong and secure, but using a smart contract that hasn’t been properly tested and audited can compromise your project and your funds. In WP Smart Contracts we use only community audited smart contracts that have been proven to be trustworthy and safe.

9. Are My Private Keys Safe?

Yes, Blockbook™ would never have access to your private keys. They are safely stored in Metamask, which is a very reputable wallet-tool in the market that allows you to safely interact with smart contracts.

10. Are the Smart Contracts Audited?

Are the Smart Contracts Audited?

Yes, all Blockbook™ Smart Contracts are based on the secure OpenZeppelin and ConsenSys implementations of ERC-20 Tokens. Both sets of contracts have been extensively audited and used by the Ethereum community for years.

Furthermore, Blockbook™ deploys your contracts and make them openly visible and auditable in etherscan.io a very well recognized Ethereum explorer.

11. Can I Test My Smart Contract Before Going Live?

Can I Test My Smart Contract Before Going Live?

Absolutely, you can easily test your contracts in the test network of your preference using Metamask, and then, when you are ready, you can deploy your contracts to the main Ethereum network.