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Smart Contracts 101

You must admit; the term blockchain is popping up more and more often these days (perhaps not as often as crypto or bitcoin though – but often enough). The crypto crazy is also reached blockchain technology enthusiasts, and ingenious companies are already cashing in.  American company Long Island Ice Tea Corp. shares rose as much as 289% after the unprofitable company changed its name to Long Blockchain Corp. I wonder what a beverage like ice tea has to do with blockchain – A secure distributed ledger of transactions.

 

 

Application of blockchain technology

The most well-known application of distributed ledger technology (DLT) is the management of bitcoin and other cryptocurrencies. However, the technology is becoming wider adopted for applications in which high-volume, secure, redundant and transparent record-keeping is critical.

So, what is a smart contract?

A smart contract is a self-executing program that uses blockchain (distributed ledger technology) to store rules for a particular transaction, verify the request, and execute the agreed terms.

What’s all the hype about you’re wondering?

In Smart Contracts are Winning over Tech Startups , Ralph Tkatchuk explains:

“…smart contracts form the basis of what could be the next frontier for tech startups: an automated solution for transactions that could eliminate human error from negotiations, labor disputes, and even inter-corporate agreements.”

At PayNinja we are using smart contracts on the blockchain. This means that either a freelancer or hirer creates a job on the PayNinja platform (technically they are creating a smart contract) and specify the work that needs to be done. When the agreed conditions are met, the contract executes itself and payment is released automatically. Clearly, the benefits are immense for both parties: no disputes, time and money saving, payment on time, project continuity. But in essence, it simply translates to peace of mind, efficiency and fairness for all.

Smart contracts provide the next opportunity to streamline and automate routine transactions, saving us time, worries and legal costs. In my opinion, a very appealing proposition.