2022-02-07
Smart Contracts
Blockchain technology has been on the rise since the Industrial Revolution 4.0 has taken the world into a new age. Blockchain technology began to gain attention after Satoshi’s 2008 bitcoin whitepaper. With the rise of bitcoin’s popularity, more innovations have been introduced to the blockchain technology. One of the biggest innovations in blockchain technology is smart contract, which opens up the technology to a wealth of new inventions and creativity.
The power of blockchain technology lies on the security of the data stored on the blocks, and the immutability of the stored data. Smart contracts are programmable contracts that exists on blockchains. It works on an If This, Then That (IFTTT) logic, where developers and programmers write codes for certain commands that execute when certain conditions are reached, and the programs run automatically and all the program executions are recorded on the blockchains.
On the surface, smart contracts seem similar to any other programs. However, the main difference between smart contracts and traditional programs are that smart contracts do not have a central authority that manages the contracts once launched on the blockchains. This enables the creation of decentralised applications or dApps that are owned by the community that runs it, therefore bringing power back to the users. In addition, smart contracts run on blockchains. All the programs, executions, are recorded on the blockchains and therefore is transparent to the public. With the security of blockchains, applications on smart contracts are safer against attacks that typically occur in traditional applications.
Smart contracts are different than decentralised applications. Smart contracts are typically Turing-complete, which enables the smart contracts to run any logical programs. Smart contracts are written using programming languages, some are programming languages are purpose-built for smart contracts, while some smart contracts use traditional programming languages such as Python and C#. Meanwhile, decentralised applications are applications that are built on the smart contracts.
Smart contracts are not without imperfections. There have been problems on smart contracts, the biggest of which are hacking. As smart contracts are decentralised, with no authority in control, managing against attackers are difficult. These attacks come due to the nature of Turing-completeness of the smart contracts. Applications built on the smart contracts have potential of having bugs, which if discovered, can be exploited by attackers. One of the popular attacks is the Ethereum DAO attack. Ethereum itself was never hacked, but one of the applications, called DAO was attacked during the crowdfunding event. To circumvent the attack, the Ethereum network was hard-forked by the community.
There are many smart contracts available on the market. The top five most popular smart contracts are Ethereum, Cardano, Solana, Avax and Terra. Ethereum is the first programmable blockchain, with many popular decentralised applications today are built on the Ethereum network.
Smart contracts are one of the most important invention that brings blockchain into the limelight of the IR4.0. It enables the creation of dApps and opens up for unlimited creativity in the digital era.
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