A Brief Introduction to Smart Contracts and the Ethical Economy
Ethereum is arguably the second largest digital currency platform, after Bitcoin, by market cap. It’s an open-source, decentralized, cross-chain distributed network with smart contract capability, which works on the principal of “smart contracts.”
Ethereal, the protocol which makes up the backbone of the Ethereum network, is powered by an “Ethereum Virtual Machine.” This virtual machine (EVM) is a computer-generated language that represents the program and its logic in a standardized, reusable form. As such, EVM is used as the scripting language for smart contracts (i.e., contracts where a specific contract is created for a specific contract, and that contract performs a specific function).
Once created, smart contract is executed whenever certain conditions are met (or an event occurs that triggers the conditions). In essence, smart contracts act as a legal agreement between two parties (which may be parties that are not even physically in one another’s physical presence). A “contract” is an automated program written to execute pre-determined pre-programmed functions. The program is programmed to execute an action, such as sending money, buying or selling a certain asset, or performing a series of mathematical calculations. There are several types of programs that can be programmed; but all are basically programs that are executed.
When using smart contract, the programming language for the contract is usually written into the contract itself, or it can be partially written in advance, and then later modified if necessary. This programming language then becomes part of the EVM and executes. In order to use smart contracts, one must have an account in the Ethereum network, and at least one account to store the contract’s code. In addition to creating contracts, one may also use them to run other smart contracts, or to perform a host of functions, such as: sending funds to contracts or to another account.
Using smart contract, you can develop your own self-sovereign identity online, which may not be related to your employer or your company. For instance, if you were working as a freelancer, you could make money from a specific list of freelance projects that you have created online and sell these projects to other companies. These projects could include information technology projects, research, and even writing articles for other people.
Using smart contract also allows people and organizations to exchange their money and assets, without the need of a third party. For instance, let’s say you’re starting up your own software business, you may be looking to purchase a piece of real estate, and would like to use the traditional ways to buy property such as a building or property. If you were interested in making a deal with a real estate agent, you would have to pay a commission to the agent to sell you a house. With smart contract, you can actually use this land to sell your own property, and the agent will pay you a commission, instead of paying a commission to the real estate agent. (The entire smart contract code that is included in the smart contract is called the “smart contract code,” and is also used to allow you to perform a number of other transactions with the real estate.