Smart contracts are seen as a trend-setting technology that could reduce bureaucratic structures. But what are smart contracts about?.What is a smart contract?Smart contract is an agreement that involves two or more parties and is capable of executing and enforcing itself. All this is possible thanks to the source code with which the contract has been developed, which allows it to be executed in an automatic and autonomous way when it is necessary to apply the smart contract.
However, it should not be forgotten that computer programs are still vulnerable, since a software is not a machine, it is a “human” one. This means that all the software market that exist have been developed by humans and not by machines, which promotes that they may have some error, however the code is increasingly robust.Applications of Smart contracts: What is Counterparty?Counterparty was born in 2014. It is an open source platform where you can develop peer-to-peer applications, initially oriented to the financial sector, on Bitcoin’s blockchain.
Currently the protocol implements and supports the creation of assets, the issuance of bonds of those assets, payment of dividends, the trading of assets using a decentralized market, binary bets, and contracts-for-difference (CFD). Its open source protocol, in addition to allowing the creation and operation of digital assets, also allows writing intelligent contracts, allowing to transform many of the real-world actions into code that work automatically without the need for intermediaries and resistant to failures.What is RootStock?It is an open source platform for creating smart contracts that will reward miners who participate actively. Its main objective is to add value and functionality to the Bitcoin ecosystem by activating secure smart contracts in the network, adding options for instant payments and greater scalability. To do this, RootStock, uses side chains, connected to the Bitcoin chain, and its token (Roots), which will only be exchanged for bitcoins.Smart contracts in EthereumBefore starting with Ethereum, we want to warn that in this article Ethereum is not going to be compared with Ethereum Classic, we are simply going to limit ourselves to describing the objective of its software whose token or asset could be Ethereum, Ethereum Classic, Classic Ethereum or Ethereum Origin (among others that have emerged after the problems of TheDAO).Ethereum takes the Bitcoin smart contracts to another level and is the one who, mainly, has inspired other solutions, such as Counter Party or Rootstock, that want to achieve the same thing but on the Bitcoin network.These applications are executed exactly as they were programmed without these having the possibility of suspending all their execution or that they may suffer some type of fraud or the interference of third parties (people, etc).
A smart contract can supply all that is necessary when implementing it between the landlord and the tenant, and incorporating the contract to the Ethereum platform, which will be charging the rent and all the agreements automatically and autonomously. So, smart contracts are creating a much stronger layer of security and confidence in the market and all future companies.