Do you remember the last time you signed an agreement in person? If you’ve ever had experience with the legal sector, you’ll be used to signing contractual agreements. A smart contract is very similar, except it’s a digital agreement made up of code on a blockchain.
The concept of smart contracts was first proposed in 1997 by cryptographer Nicholas Szabo. He defined smart contracts as “a computerized transaction protocol that executes the terms of a contract.” Now, smart contracts have evolved into a key component of Web3. Ethereum is currently the most popular smart contract platform, however, blockchains such as Tezos, Polkadot, and Algorand can also run smart contracts.
Since their introduction, smart contracts have been implemented across various industries to solve problems such as safeguarding the efficacy of medications and increasing trust in retailer-supplier relationships.
A smart contract is a digital ledger that runs on blockchain technology. A blockchain is a database that stores information in blocks. Once a block is filled it’s added to a chain of other blocks. Blockchains are known for their vital role in cryptocurrency ecosystems as they maintain a secure and decentralized record of transactions. However, they’re used for other things other than crypto—they’re used for smart contracts, too.
Smart contracts are used to automate the execution of an agreement without any intermediary involvement or time loss. Two users can agree on the terms of the contract setting the “if/when…then…” otherwise known as the contract conditions, and once these needs are met the contract is automated. The data is secured on the blockchain and can’t be altered in any way shape or form.
Although you may have seen the buzz around NFTs, you might be surprised to know that NFTs are minted through smart contracts. Smart contracts allow NFTs to be assigned ownership and reassigned when they’re transferred or resold, and are a successful example of how smart contracts work.
Now that you know what a smart contract is, let’s explore the benefits of using this technology.
Smart contracts provide secure and immutable contracts that save time and money, due to their automatic processes. In fact, there’s many advantages to using smart contracts, including:
Speed and efficiency: Once the required conditions have been met, the contract is executed immediately.
Accuracy: With no paperwork involved and contracts are executed digitally, the chance of human error is eliminated.
Security: Smart contracts are executed with blockchain technology, and all transactions are recorded and encrypted. Once a transaction is saved it can never be lost, meaning your data is always backed up and secure.
Savings: You don’t need to hire a third party to conduct agreements or handle transactions, therefore saving money on potential fees.
Smart contracts have the potential to make a big difference across the world. For example, ledger-protected votes would eliminate any chance of rigging during political elections, with other uses improving both healthcare and supply chains.
LOX uses smart contracts to tackle the smartphone crime epidemic. But how?
LOX Network is striving to tackle the global smartphone crime epidemic with the world’s first global blockchain-based IMEI blacklist. Our project is designed to target and dismantle the mobile phone theft industry through a decentralized blacklist by providing a hybrid blockchain solution.
We are bringing a revolutionary NFT proof-of-ownership model to a powerful, decentralized ledger. Our layer 1 solution grants users full control of their digital assets—while developers can quickly and efficiently launch products such as mobile security, online marketplaces and content creator revenue streams.
As blockchain technology continues being adopted by incoming services, smart contracts will become a standardized part of tech stacks the world over. The LOX Network API is designed to account for this and is connectable to smart contracts using a simple oracle intermediary.
Our technical ecosystem is powered by our native token LOX. You can now start trading LOX on BitMart, read more about it here.