Hash Notes

Let's imagine a world where we can sell our homes without real estate commission, seller commissions, closing costs, and other various fees.

Real estate transactions require a ton of paperwork to verify financial information and ownership and then transfer deeds and titles to new owners. Using blockchain technology to record real estate transactions can provide a more secure and accessible means of verifying and transferring ownership. That can speed up transactions, reduce paperwork, and save money.

What about a world where we can hold presidential candidates accountable for all the promises they make during the campaign?

Presidential Candidate "Crypto Coffee Bean" promises that if it becomes a president, it promises all the citizens of the Coffee Crypto Chat world one free Bitcoin per citizen. Coffee Crypto Chat citizens may find assurance in this promise when they see that a Smart Contract is codified on a Blockchain with these terms and conditions. Another interesting trait of a Smart Contract is that it is "immutable" and "distributable" which means, once “Crypto Coffee Bean” becomes a president, the smart contract will trigger the one Bitcoin payout and this cannot be changed.

A potential solution may be utilization of Smart Contracts.

What is Smart Contract?

A smart contract is a self-executing contract containing the terms and conditions of an agreement in a computer program stored [Codes of “If/when x event happens, then execute y action.”] within a blockchain. This removes the need to interpret the contract and the code autonomously handles all verification, transaction, and notification of its actions. All affected parties involved in the smart contract are guaranteed the outcome and its execution without any force bottlenecking and/or stalling the resolving of the process.

Smart contract removes the ambiguity. It goes from I want “an assurance” to “a guarantee” that my insurance to be paid out if/when x event happens, then y action will be executed [Insurance Payment will be issued].

Two Unique Traits of Smart Contracts:

Immutable: Once a smart contract is created, it can never be changed again.

Distributable: The output of the contract is validated by everyone, so a single person cannot force the contract to release the funds because other people on the network will spot this attempt and mark it as invalid.

Oracles

In the example of Crypto Coffee Bean Presidential Candidate, how does the Smart Contract know that “Crypto Coffee Bean” won the presidential election? This is when Oracle is involved. Blockchain oracles are entities that connect blockchains to external systems, thereby enabling smart contracts to execute based upon inputs and outputs from the real world.

The oracles are gateways between on-chain networks and off-chain networks. When the smart contract needs outside information that aren't available within its blockchain it will interact with oracles to access that information.

Oracles function as autonomous auditors, protecting users from fractional reserve practices.

Here are some applications of Smart Contracts.

• Money Transfers: Money transfers using Smart Contracts can be less expensive and faster than using existing money transfer services. This is especially true of cross-border transactions, which are often slow and expensive.

• Insurance: Using smart contracts can provide greater transparency for customers and insurance providers. Recording all claims on a blockchain would keep customers from making duplicate claims for the same event. Furthermore, using smart contracts can speed up the process for claimants to receive payments.

• Government Benefits: Another way to use a Smart Contract is the administration and distribution of government benefits, such as welfare programs, Social Security, and Medicare. Using smart contracts could reduce fraud and the costs of operations. Meanwhile, beneficiaries can receive funds more quickly through digital disbursement on the blockchain.

• Artist Royalties: Using blockchain technology to track music and film files distributed over the internet can make sure that artists are paid for their work. The terms and conditions codified in Smart Contracts and it will be executed accordingly.