Smart Contracts: The Good, the Bad, and the Ugly

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Smart contract is a special protocol intended to contribute, verify or implement the negotiation or execution of the contract. Smart contracts allow you to conduct credible transactions without the need for a third party. These transactions are traceable and irreversible. Smart contracts contain all the information about the terms of the contract and automatically perform all the planned actions.

How did smart contracts appear?
The idea was originally described by computer scientist and cryptographer Nick Szabo in 1994.
He defined the most important principles of the work, but at the time there was no proper environment to carry them out. Much has changed since the emergence of Blockchain technology. Bitcoin laid the groundwork for Blockchain. However, their tools failed to meet all of their needs. The appearance of the Ethereum put the smart contracts in operation for all, giving a new impetus to business promotion.

How do smart contracts work?
The most important principle can be compared to the work of automated vending machines.
They only execute the instructions that are provided to them automatically.

First, the assets and the terms of the contract are coded and placed in the block of a Blockchain. This agreement is distributed and copied several times between the platform nodes. After the initiation of the process, the contract is executed in accordance with the terms contained therein. The program verifies the implementation of the appointments automatically.

Smart Contract Developers