Along with blockchains, the idea of Smart Contracts is all the rage these days, but what exactly are they?
Photo by Markus Spiske on Unsplash
It’s a computer programme
A Smart Contract is nothing more or less than a computer programme, like the millions of other computer programmes that are written to enable things like buying tickets online, looking at Youtube videos or sharing pictures of your cats on Facebook.
But a Facebook picture-sharing computer programme, for example, is stored and executed on Facebook computers. Whenever Facebook wants to change the programme, they can just do it and you will never know. It’s their programme and they do whatever they like with it.
Enter the “contract”
By contrast, a Smart Contract is stored on a blockchain and executed by computers that participate in the creation of that blockchain. Once it is written and deployed to the blockchain, it cannot be changed. It can only be accessed and executed.
In public blockchains, like Ethereum or Bitcoin, these contracts are public. So you can inspect the code and decide whether or not you think it does what it says it does. If you do, you can decide to use it. So in that respect it is a “contract” - it is an agreement that it will do what it promises to do if you run it.
But is it smart?
Well, it is only as smart as the people who write it. Smart contracts can do very clever things. There is an active community of people writing smart contracts for all sorts of use cases: games, asset registries, community platforms etc. You can have a look here to see what people are doing on the Ethereum platform.
But smart contracts are not always smart. In a very famous case in 2016, a very complex smart contract known as “The DAO” was hacked and millions of dollars worth of investments into this project were stolen.
It was a stark reminder that smart contracts are not some miracle technology and that the whole industry is very much in its infancy. So buyer beware!
A simple smart contract
Fortunately, the Nottario smart contract is super simple. All it does is take a fingerprint of a document and store it in the blockchain. It is so simple you can’t do anything with that information other than read it back. And the Nottario smart contract, with the fingerprint of your document in it, provides incontrovertible proof of your ownership of that document since the moment you created the smart contract. So why not give it a try and get involved in the smart contract revolution?