You have probably heard of blockchain many times, especially if the topic is tocens. But do not only think of tocens when it is about blockchain, it is much more than only that, smart contracts for example. It is a big innovation in blockchain technology. Before talking about smart contracts, we should clarify what is blockchain. We can think of blockchain as a registry that everyone has a copy of. The information you write in this ledger is secure because everyone has a copy, so it can not be changed or deleted. In other words, blockchain is decentralized and distributed digital ledger technology that records transactions across a network of computers in a secure, transparent, and immutable manner. Also blockchain’s trustworthiness has enabled it to find its way into many industries.
The use of smart contracts on the blockchain is an important technology that is growing significantly, especially in insurance, banking, government and other sectors with similar needs. A smart contract is a self-executing contract with the terms of the agreement directly written into code. It automatically executes actions when predefined conditions are met, eliminating the need for intermediaries or third parties to facilitate or verify transactions. Smart contarcts offers more efficient and faster solutions instead of traditional contracts. Beside being fast, since the blockchain is visible to all parties, all signatures and contract status are recorded in a completely transparent way, and it also turns the ledger into a single source of truth.
Even if smart contracts are very useful, there are some cons of it. Smart contracts are susceptible to coding errors, security vulnerabilities, and exploits, leading to financial losses and reputational damage. Therefore, rigorous code audits, testing, and best practices are essential when developing and deploying smart contracts. Even they are digital, all contracts must be comply with the law. The legal status of smart contracts varies across jurisdictions, and regulatory frameworks are still evolving. Issues related to contract enforceability, liability, and dispute resolution remain significant considerations in the adoption and implementation of smart contracts.