Data sharing has become an incredibly common practice in today’s modern era of big data and artificial intelligence, with world affairs changing rapidly and switching to online marketplaces, banking, etc. Keeping these vast data sharing requirements in mind, blockchain was introduced as a platform that primarily serves the purpose of allowing participants to share and receive data that is free of any unwanted external influence. In other words, it is a data-sharing platform that has high security priorities.

What is blockchain?

Blockchain is a newly developing and emerging technology that has the potential of completely changing the way the world runs. It is a data structure that can be used for public and private data sharing purposes, the only real difference would be that it focuses more on data sharing with a network of computers and not only one individual.

The introduction of blockchain technology is accompanied by a greater hope of data traceability and accountability. Blockchain is especially useful when it comes to data transfer between several parties and plays a vital role in ensuring the security of data.

Further in this article, we will be discussing smart contracts.

What are smart contracts and how do they work?

Smart contracts are a computer protocol established to digitally verify, update and enforce the performance of a set contract. Alternatively they can be described as programs that are stored on blockchain. These programs are designed in a way that they run only when the set conditions are met. Mostly they serve the purpose of automating the execution of an agreement such that all participating members are notified without the intermediation of a third party.

How do smart contracts work?

The working of smart contracts is based on an incredibly efficient way. They work by following simple “if/when…then…” statements that are written as codes on a blockchain. There is a network of computers that work together to execute the predetermined conditions as soon as they are met and verified. These predetermined conditions are just a set of rules and tasks that are set by the owners who run the program according to their requirements.

Let’s consider some examples of a situation where this can be used:

1) Companies can use them to release funds to desired participants

2) Previously unregistered vehicles can be registered, notifications can be sent and even tickets can be given to related parties.

After the notification has been issued, the transaction is rendered complete. After this the transaction can not be edited, thereby leaving no space for any sort of manipulation or editing.

What are the benefits that are usually associated with smart contracts?

1) Speed

Smart contracts as the word suggests have a very “smart” and efficient working system. As soon as a condition is met the contract is immediately executed. There are no delays, everything is automated and quick. All participants are notified with the correct information. 100% accuracy is guaranteed.

2) Security

Transparency and security are two essential elements that are a crucial part of practically everything involved in blockchain. In fact, security is one of the most important purposes that blockchains serve. Smart contracts do not involve any unrelated third party and even participants get encrypted records of transactions, this ensures that there is no possible way that data can be altered and edited. Moreover, because blockchain transaction records are encrypted with Asymmetric key cryptography. Data is always in a secure state.

Conclusively, it can be said that blockchain is one of the greatest developments made in the online world and has the potential of modernizing numerous systems of the world. Blockchain is still in the process of being fully developed and further enhancements are expected.

If you are interested in using this development for yourself and your company, please feel free to contact us at contact@edexa.io

Written by:
Christian Bredemeier & Shubham Koli

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