What is Smart Contract? Very Basic Understanding

[gabbie2010]

Smart contract is a process whereby codes are stored in a blockchain to ensure trustful transactions.
Smart contract will read and verify the entire source code before agreement between the parties involved.
This will be executed once and deployed to the blockchain where it cannot be altered by anybody hence transaction is performed without any intermediary charging a huge fee.

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[aitrading]

I found interesting article about it on Medium https://medium.com/swarmdotmarket/what-smart-contracts-mean-for-the-future-of-business-bee84dc629a3

[payperblock]

Smart contract projects are needed in all sectors, we are yet to see more of that in Legal industries, combined with artificial intelligence.

[rivkavender]

this is an important topic everyone should know about. Smart contracts are the future

[vit05]

RSK is working to implement smart contracts with Bitcoin. It will be the only one that will also reward the miners in bitcoins using merge-mining. An interesting fact is that they do not have a pre-mined token.

https://www.rsk.co

[pkhutal]

You have mentioned the "dispute" issue but didn't address it.

Contracts, in general, are a set of rules to follow. When everything goes well, everyone walks away happy. The trouble (and the real purpose of a contract) becomes relevant once there's a dispute. The big problem with smart contracts today is either foreseen or unforeseen conflicts. How can those be mediated?

I agree dispute is largest elephant in room, which is unaddressed. We pay highest to lawyers to make contracts so they can find element of disputes in conditions and variables.

Disputes can rise in variables and conditions between 1 or N parties. Dispute also need to take in account time frame, non-tangable and perceptionable problems. Eg. Logo for one client can be monogram for another.

Every contract has sample frames to explain things in detail and explaining obviousness in Clarity and again and again. Condition needs to be explained with all test in time ideas.
Law of Land ,morality, conflicting court and locations like constraints should be cosidered as well.

I am also working on non-deterministic states of Smart Contract. Will share you the details soon.

Thanks!

[jackjackfly]

Your description is still to difficult for a common user. Won 't it be better to explain just in few sentances. Something like :"A set of rules which controls the way tokens be distributed, a code which has rules for tokens" etc Would be easier for non technical based users

[TheQuin]

Would be easier for non technical based users

This is the "Bitcoin > Development & Technical Discussion" board so it is appropriate to assume that anyone reading has some basic technical knowledge.

[ahmad21]

Your description is still to difficult for a common user. Won 't it be better to explain just in few sentances. Something like :"A set of rules which controls the way tokens be distributed, a code which has rules for tokens" etc Would be easier for non technical based users

Smart contract is a computer program which is designed to facilitate, verify or implement the performance of a particular contract. They allow the implementation of the transaction without the involvement of third parties. The basic motive of smart contracts is to provide more security than what is available in traditional contracts and reduce the time, work and costs related to the contracts.

This is the very simple explanation. Actually the reality is that only token development is not the idea of smart contract so it can't be taken in that way. Its basically a contract only which is used for development of tokens now a days.

[BEX]

If you want to better understand whether smart contracts are usable in our daily lifes, I would suggest this article...https://www.blockchains-expert.com/en/are-smart-contracts-ready-for-mass-adoption/

[pkhutal]

You have mentioned the "dispute" issue but didn't address it.

Contracts, in general, are a set of rules to follow. When everything goes well, everyone walks away happy. The trouble (and the real purpose of a contract) becomes relevant once there's a dispute. The big problem with smart contracts today is either foreseen or unforeseen conflicts. How can those be mediated?

This looks promising :

https://medium.com/kleros/kleros-a-decentralized-court-system-for-the-internet-abridged-1e415c04604a

[Samarkand]

You have mentioned the "dispute" issue but didn't address it.

Contracts, in general, are a set of rules to follow. When everything goes well, everyone walks away happy. The trouble (and the real purpose of a contract) becomes relevant once there's a dispute. The big problem with smart contracts today is either foreseen or unforeseen conflicts. How can those be mediated?

This looks promising :

https://medium.com/kleros/kleros-a-decentralized-court-system-for-the-internet-abridged-1e415c04604a

This looks like another project where the founders mainly intend to enrich themselves.

Why are they already running a token sale when they have nothing to show apart from
a whitepaper, a Medium article and a small amount of code at Github?

A quote from the Medium article:

When the party decides to send the case to arbitration, the contract in plain English
(or the natural language chosen) and all relevant pieces of evidence are sent to Kleros secured by public key cryptography.

This doesn´t sound particularly decentralized to me.

Besides, I highly doubt that this is a good application of a decentralized system. Court systems
are handling huge amounts of highly sensitive information, not many people will be interested in providing
evidence to anonymous online jurors.

These guys should rather contribute to Bitcoin or one of the related projects (2nd-layer solutions, wallet
software...) instead of wasting time on a project like this that is never going to work. But then they probably
wouldn´t have the need to run a token sale...

[etherixdevs]

In my opinion if we use smart contracts there is no dispute at all.
Just a very basic simple example: If i rent you my house, and the electronic key opens the door only if you paid me, there is no dispute at all if you do not pay me, you will never enter into my house.
I suggest you to read this easy article to understand a little more
https://www.coindesk.com/information/ethereum-smart-contracts-work/
I found it interesting

[lianghwajou]

A contract can be thought of as a piece of paper that specifies how all parties involved can interact with one another. For example, a sales contract will specify the agreement between a buyer and seller covering the payment and delivery of goods. A smart contract is a computer program that implements the contract. The rules or the agreement of the contract are written in computer code so all parties can only interact with one another  according to the rules. The computer code for a smart contract is normally available to public so people can examine and understand precisely how the contract will work.

[pkhutal]

You have mentioned the "dispute" issue but didn't address it.

Contracts, in general, are a set of rules to follow. When everything goes well, everyone walks away happy. The trouble (and the real purpose of a contract) becomes relevant once there's a dispute. The big problem with smart contracts today is either foreseen or unforeseen conflicts. How can those be mediated?

This looks promising :

https://medium.com/kleros/kleros-a-decentralized-court-system-for-the-internet-abridged-1e415c04604a

This looks like another project where the founders mainly intend to enrich themselves.

Why are they already running a token sale when they have nothing to show apart from
a whitepaper, a Medium article and a small amount of code at Github?

A quote from the Medium article:

When the party decides to send the case to arbitration, the contract in plain English
(or the natural language chosen) and all relevant pieces of evidence are sent to Kleros secured by public key cryptography.

This doesn´t sound particularly decentralized to me.

Besides, I highly doubt that this is a good application of a decentralized system. Court systems
are handling huge amounts of highly sensitive information, not many people will be interested in providing
evidence to anonymous online jurors.

These guys should rather contribute to Bitcoin or one of the related projects (2nd-layer solutions, wallet
software...) instead of wasting time on a project like this that is never going to work. But then they probably
wouldn´t have the need to run a token sale...

I agree, but this is good in case of "Small Claim Arbitration".

In the early 1960s, 11.5% of cases in American federal courts went to trial. In 2002, the number had fallen to just 1.8%. The decline is not the result of fewer disputes, but the consequence of the growing use of alternative processes to deal with problems (Katsh and Rabinovich-Einy 2017, p. 14).