If you are new to the blockchain world, you might be confused with some of the technical terms. If this is your first time to come across the word “smart contract,” you might be having some difficulties understanding how it works. Here is a guide to understanding the smart contract platforms.
3 Main Features of Smart Contracts
Smart contracts are automated contracts. They are self-executing contracts with specific instructions on its code, which get executed when the conditions and demands are met. Its three main features are: deterministic, terminable, and isolated.
When a program gives the same result to the same set of inputs in different computers, the program is called deterministic. A smart contract is deterministic since it executes all the time the same outputs given the same input of data to all computers in the system.
Although there is some degree of difficulty, smart contracts are terminable because the contracts can be externally “killed,” which prevents going to endless loops. If the contract execution exceeds a certain time limit, smart contracts may be externally aborted.
Using the blockchain, anyone may be able to upload a smart contract. However, since anyone may potentially upload a bug or a virus, it is critical for a contract to be kept isolated in a sandbox to save the entire ecosystem from any negative effects.
Most Popular Smart Contract Platforms
Ethereum is known to be the one that started it all. According to the Ethereum website, “Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.”
EOS claims to be Ethereum’s number one rival, which will eventually dominate the market. EOS plans to completely remove transaction fees and claims to have the ability to do millions of transactions per second. EOS aims to become a decentralized operating system, which can support industrial-scale decentralized applications.
Neo is known as the “Ethereum of China.” As the NEO website puts it, NEO is a “non-profit community-based blockchain project that utilizes blockchain technology and digital identity to digitize assets, to automate the management of digital assets using smart contracts, and to realize a “smart economy” with a distributed network.”
The smart contract technology has the potential to revolutionize business models and the financial industry as a whole. Although these cryptocurrency projects are currently undervalued, many projects in the pipeline give these projects so much potential in the future, which is good news for long-term investors.