Smart contracts – What are they?
Ethereum was the first platform to introduce the concept of smart contracts. Keep reading to find out more about what smart contracts are all about.
Smart contracts will remove the middlemen and make processes cost effective.
Ethereum aim is to make everyday life that bit more efficient and cost effective, by automating daily processes and creating a system without the middlemen. This could be used in not just the financial system, but also in the legal system, computer systems or more.
To understand smart contracts let’s look at the following example:
Mark has stored his will and the deed to his house on the Ethereum blockchain. We can assume that on the day of his death, his death certificate will also be added to the existing documents and will also become part of the blockchain.
The process for Mark’s estate to be transferred by the directions he left on his will, is an administrative job which involves a few people and therefore may take time as it would include legal professionals, the government, property registrar and tax authorities.
Having these documents on the Ethereum blockchain, Mark’s will will be placed into action instantly.
The Ethereum network will make sure to automatically put Mark’s will into action without the need of all the traditional parties involved and without having to lose time for the traditional process. This not only helps make things move faster but is also cost efficient.
Currently there are many projects that are being built, but none of such magnitude. It is left to be seen how instrumental Ethereum will be, yet the structure may change not only the financial structure of today but even others.