"Smart Contracts and Blocking Technology" Towards more reliable and less risky contracts Dr. Hossam Mohamed El Shenaraki (Professor of Information Sec

Smart contracts: self-executing contracts with the terms of the agreement between the seller and the buyer are translated directly into the software lines without interference from a third party without the need for a central authority or legal system or even an external execution mechanism.

Smart contracts are a special protocol intended to contribute or verify the execution of the negotiation or performance of the contract. Such transactions are interchangeable, transparent and irrevocable. Thus we can say that smart contracts contain all the information about the terms of the contracts and perform all necessary procedures automatically.

The emergence of smart contracts:

The origin of the smart contracts dates back to 1994 by American computer scientist Nick Zabo, "the inventor of the virtual currency House Gold in 1998, ten years before the creation of the Pitcairn." Some rumor has it that the owner of the Betquin invention is Nick Zabo himself, but later denied it.

At first, he identified the main principles of the work and said he wanted to expand the functions of electronic transaction methods such as sales and purchase, but the environment did not help to develop this. Zabo suggested implementing a contract for synthetic assets, such as derivatives and bonds. These new securities are made up by combining securities such as bonds and derivatives such as contracts.

After the advent of BLOCK CHAIN technology, this changed, with Bitcoin developing new BLOCK CHAIN contracts where derivatives are mostly traded through computer networks using complex structures. But it was not enough that led to the emergence of etherium and new foundations for smart contracts were laid and made available to all.

Smart Contract Features:

1. Enjoy security where it is encrypted and distributed

2 - characterized by speed.

3 - Avoiding legal problems according to various principles, including decentralization and an open network where trust stems from computer programs instead of reputation or law.

Cons of smart contracts:

1. The code is written by people and can be written incorrectly. If you then deploy the smart nodes in BlockCin, it can not be changed.

Smart contracts are not regulated by any government. There is therefore a potential problem if government institutions decide to put in place a legislative framework for smart contracts.

3. Smart contracts can not be implemented without programming. It is necessary to have an experienced coder to make smart contracts successful and safe, especially if the company's internal structural dependence on pluchen technology.

 

The question now arises: Are smart contract platforms being developed based on the Bitquin network, also known as the Shane Block, or using a different series of currencies?

For example, etherium has developed its platform by relying on the series of Petequin blocks that have enabled it to execute many different contracts.

In 2014, many developers of smart contracts, relying mainly on the Bitquin block, were in trouble after updating the Bitquin protocol, and their method of including data was useless, but it was dramatically addressed in 2015. Which smart contracts and what value-added do you offer

In addition to sending and receiving digital currency quickly, easily and decentralized, the blockchain network also contributed to finding the solution to the most important problems for agreements between dealers without involving banks and courts through the establishment of so-called smart contracts.

So it is a kind of revolutionary application that uses the decentralized network that is the basis of Bitquin and the digital currency in general. The idea behind smart contracts is that software can automate the contracting process, enabling the execution, performance and monitoring of contractual promises without human intervention, which reduces the costs of managing the trade and minimizing errors.

Developing smart contracts

Today many companies and organizations are developing platforms and applications for smart contracts. Bithalo, for example, provides a platform for the common account system by which Contracting Parties will be able to deposit money or produce joint work in a protected environment. Hedgy also develops contract derivatives and its platform will reduce the risks of the other party and increase the speed of settlement through direct processing. Swarm has also developed a platform that helps companies mobilize crowdsource using cryptoequity contracts that will give their holders rights such as voting, profit sharing and executive decision control.

Improved smart contracts in two formats

1. A renegotiation formula

Smart contracts based on the digital currency protocol can be a global revolution in the world of contracts and agreements, but in some cases these contracts can not guarantee contracting parties to identify all aspects of their deal because in fact the process is not that simple, and contracting parties want to level Above the flexibility and want to spare themselves the strict obligations suffered by many with conventional contracts, and this is exactly what the developers of smart contracts, where they work to make these contracts can be renegotiated between the parties in the event of any emergency circumstances must be through Allowing parties to amend their agreements instead of keeping the injured party hostage to an old contract.

2. A formula for automatic adjustment

The contracting parties also wish to integrate mechanisms that would govern the terms of the agreement without having to renegotiate. In commercial loans, banks set interest rates based on the size of the loan and the length of time. But in some cases, the borrower becomes very vulnerable when he finds that the same bank has made new offers at a lower interest rate and finds itself performing less than what he would have done if he had borrowed after the new developments. Can play an important role in the formulation of a mechanism to reduce the rights of all parties according to any innovations in the form of without renegotiation and can not be manipulated because it is encoded encryption in the network decentralized block chain.

? ? Smart contracts can be explained in a simplified way and easy Smart Contracts and BLOCK CHAIN

Smart contracts are an important part of BLOCK CHAIN technology, so in this article we will explain what smart contracts are. But first, let's offer a quick feed to explain how BLOCK CHAIN works. BLOCK CHAIN can be visualized as follows:

? A similar agreement is written on a set of documents

? Anyone can participate in maintaining this Agreement by owning one of these documents

? Rules describe the changes you are allowed to make to a document

? Any correct change to one document is automatically made to all other documents

These properties lead to each participant in the BLOCK CHAIN or documenting and editing the agreement on a copy of the same agreement, although the agreement is subject to constant change every second ... accurate ... ..

The above analogy describes one set of documents (BLOCK CHAIN) that follow one set of rules. Different sets of documents have different rules for what changes are valid. The original collection of documents is called the Petequin. The rules of this collection of documents are:

? Each document contains a list of all accounts and balances.

? People own accounts, and their Bitcoin can be sent to other accounts.

In essence, these rules are created through digital money. The following is an explanation of one of the documents via the KFH network. The number next to each account indicates the amount of Bitquin in this account.

Another set of documents is called ethrium. Enriched documents that make up ethium follow very similar rules for the structure:

? Each document contains a list of all accounts and balances.

? Account holders can send transactions to other accounts.

I have noticed slight differences in wording between the first rule of the second and second pythroen. The difference is that some calculations on BLOCK CHAIN are not controlled by people. Instead, the actions of these accounts are controlled by a set of instructions on the accounts.

Here is an explanation of one of the documentation for BLOCK CHAIN. In the illustration, accounts B, E, and G are controlled by Help, not by people.

When there is a set of instructions on one of these accounts called Smart Contract. Instructions are just computer programming, based only logic. Smart nodes can:

? Perform calculations

? Storing information

? Send transactions to other accounts

As mentioned, the programmed account is not controlled by anyone, the process is completely independent! The original code is written by a person, but once the intelligent contract programming is loaded into BLOCK CHAIN, only the programming logic in the account dictates the behavior of that account via BLOCK CHAIN, which controls nothing changed in the smart nodes after it is launched.

The name "smart contract" is a somewhat confusing name because it is actually not a contract at least not in the sense that it is anything that needs to be complied with or supported. The natural contract has legal consequences in the "real world". If the counterparty in the contract does not comply with its part of the agreement, the legal system may be used to account for it. On the contrary, the intelligent contract is not supported by anyone, but is a set of self-executing instructions. Smart nodes do not have great precedence in the "real world". Smart Contract Only Software that is capable of sending transactions to other BLOCK CHAIN accounts without any interference from any central party or by any third party, and any Smart Contract Agreement to be a real agreement, the legal compound and legal provisions of the BLOCK CHAIN Agreement shall be created and Ratified by both countries externally and internally.

Reliability in Smart Contracts:

When contracting across regular contracts, many factors play an important role in whether you trust what you expect. The most obvious part is understanding what is written in the contract. The contract sets forth the terms and conditions of a legal agreement (the language of the lawyer), which it is bound by. Therefore, it is important to understand this legal rule and how it is explained by the legal system. That's why you always carefully read the terms and conditions of the agreements in Spotify, Facebook, Twitter, etc. You will never sign an agreement that promises to provide your first child as a payment for the use of their service.

The terms and conditions set out in the contract are constrained by a wide range of existing laws. This means that you can not be sure how to run the nodes just by looking at the content of the contract. There are laws that prohibit you from offering your first child as a service, even if you agree. It is therefore important to understand how the legal context is used in contract terms.

These contextual laws often act as collateral, and sometimes make contracts work as intended rather than written.

Even if you give your firstborn child to slavery to try to commit to your part of the contract, there is still a risk that it is not enough. You can sell all your property and sell your family, but you may not cover your obligations in the agreement because simply do not submit what was written in the contract, because the second party did not get what was done in the contract (money). The risk of entering into a contract with a person unable to fulfill part of the agreement is called counterparty risk and must be taken into account when entering into the contract.

Even if I understand the contract and the legal context I still need to trust in the rule of law. In some cases, sometimes the law stipulates that it is contrary to what is actually applied.

How do these factors compare to smart contracts? Smart nodes consists mainly of two elements that need to understand and trust:

? Code and how to interpret it

? BLOCK CHAIN capability

Just as with regular contracts, it is important to understand the actual content of an intelligent contract when interacting with it. However, unlike the normal contract, provided for in the law and interpreted by the legal system, the content of the Smart Contract is written in a computer code and interpreted by the computer. What is the smart contract code that actually appears?

The Smart Contract Code is the terms and conditions agreed upon prior to interaction with the Smart Contract. As long as you trust BLOCK CHAIN, the Smart Contract is based on it. The code instructions will be executed exactly as programmed, so you can not violate the agreed terms in BLOCK CHAIN. It is also important to note that the programmer's work does not mean that it will work as intended if there are errors in the code.

Smart Contract Applications

Smart nodes are a set of instructions whose conditions are programmed on BLOCK CHAIN technology, written in a computer code. This code can be written in an infinite number of ways, just like words that specify normal contract terms can be written in several ways. But like words in a sentence, there are an infinite number of ways to arrange a symbol in a smart contract that does not give us any meaning. But what is interesting is the logical order. What does that mean?

Before we answer this question, we have to look into potential applications that can be on BLOCK CHAIN. After the original paper was published, people began to realize that other types of agreements could be maintained using the same underlying technology. Others envisage other agreements establishing ownership of different types of assets and rules on how to update agreements. Some other applications such as:

? Digital identities (such as websites)

? Non-digital assets such as gold, oil and real estate

? Currency of the country, and other new types of currencies

? Financial instruments such as stocks, mortgages and bonds

? Fair gambling and betting

? Data storage market rules

? Market rules

It was a challenge that every BLOCK CHAIN is built with one application with in mind. Each new request requires a complete new BLOCK CHAIN, and creating a new BLOCK CHAIN requires a lot of resources, because a group of BLOCK CHAIN participants (Peers) need to start keeping an agreement again.

Smart contracts have changed that. Rules that define the only BLOCK CHAIN function can be replicated in smart nodes on BLOCK CHAIN based on the smart nodes. This means that instead of building a new BLOCK CHAIN for each type of application, it is possible to add several types of applications to a single BLOCK CHAIN using smart nodes. Which basically generates many BLOCK CHAIN on the same original blockbuster.

For example, BLOCK CHAIN, which determines the ownership of different types of assets, is basically just a list of who owns those assets. Instead of using a complete CHAIN BLOCK for this application, this information can be included in a smart contract. Like BLOCK CHAIN, a smart contract will basically be just a list of accounts and ownership, with rules describing the correct updates for this list.

Smart contracts have the same BLOCK CHAIN applications

Smart contracts also allow the creation of small specialized agreements, which help to create a new BLOCK CHAIN. If we want to bet with some people over the Internet, we can create an intelligent contract that will hold gambling money from the parties for 10 days and the winner will be paid automatically. Without any fraud, the contract will work on what was agreed upon with sending money to the winning party.

Power BLOCK CHAIN and Smart Contracts are not quite clear before you think about the value of interaction between different applications. For example, if you have two smart contracts, one for dollars and one for real estate, you can use a third intelligent contract as collateral, allowing the purchase of real estate without a third party broker.

There are many usage cases built on BLOCK CHAIN, and smart contracts are built on the same platform, creating an ecosystem of complementary applications.

On the contrary, we can say that smart contracts are a decentralized system that exists through computers connected to a network. One of the most important features is that you can not pay intermediaries and save time and nerves. Nick Sabo, a rights and encryption expert in 1994, explained that using a decentralized record, smart contracts, also called self-executing contracts, could be contracts or smart contracts. These contracts can be registered in the form of code and copied in the system, and their implementation is included in the BLOCK CHAIN network. With the help of the Registry, money can be transferred and goods and services are obtained. Intelligent contracts also allow for the exchange of funds, property, shares or other assets without resorting to broker services. To make a conventional deal you should go for a lawyer, pay him money and wait for the papers. Smart contracts work like vending machines: you only have to put the machine inside the machine (ie the record), and the third party contract such as a driver's license or any other service you request comes to your account. In addition to traditional agreements, intelligent contracts contain not only information on the duties of the parties and fines, but also the automatic implementation of all conditions.

At one of the BLOCK CHAIN conferences in Washington, the programmer Vitalik Puterin of the Etherum project explained that in a smart contract the original or currency moves to a program that follows certain pre-defined conditions. At a given moment, this program confirms the execution of the terms of the contract and automatically determines whether it is time for a specific asset to go to one of the participants in the transaction or to return to the owner (the condition may be more difficult). All this time the document will be open At one of the BLOCK CHAIN conferences in Washington, the programmer Vitalik Puterin of the Etherum project explained that in a smart contract the original or currency moves to a program that follows certain pre-defined conditions. At a given moment, this program confirms the execution of the terms of the contract and automatically determines whether it is time for a specific asset to go to one of the participants in the transaction or to return to the owner (the condition may be more difficult). All this time the document shall be kept and reproduced in a decentralized register, ensuring that it is reliable and does not allow either party to change the terms of the agreement.

Contracts can be written in any BLOCK CHAIN, but Ethereum is the most common and gives unlimited possibilities for writing and dealing with smart contracts.

How Smart Contracts Change Our Lives

Here it is said that the owner of the contract must receive 10,000 petequin. This contract allows people who have enough money to turn their homes into other people. The practical application of smart contracts using smart contracts can simplify work in various areas of life, including in the field of logistics, management, rights and even elections. Elections According to experts, manipulation of election results is almost impossible, thanks to smart contracts, external interference can be excluded from the electoral system. In this case, election votes will be placed in a special record, and decryption requires supernatural computational abilities. There are no computers capable of this yet, so it is impossible to penetrate this system. Management BLOCK CHAIN not only provides a transparent and secure record, but also helps to avoid misunderstandings during joint work or situations when the parties contract independently of each other. "UPS can implement contracts saying: If we get a payment for a commodity, its producer, which is located several times higher in the supply chain, will start producing this product because it is a hypothetical link to the addressee," says Jeff Garzek, developer of the Bitcoin Core protocol. The supply of the bureaucracy, when different companies must be subject to several levels of emphasis, so the givers gain money while the companies suffer losses BLOCK CHAIN allows to avoid these problems, since each participant in the chain gets access to a safe and secure system , Which monitors the execution of work and payments Nick Barclays Corporate Bank Smart contracts to record transfer rights and automatic transfer of funds to other financial institutions Cars Think of the future where everything will be automated Google is building it today through smart phones, smart glasses and even smart cars. For example, intelligent contracts will determine the culprit in the incident: the sensor or the driver, and will help analyze other situations Insurers will be able to help smart contracts determine the size of the insurance payments under the circumstances in which drivers drive their cars. Other areas Other areas such as loans and accounting will also use smart contracts, for example for risk assessment and immediate inventory. Lawyers will be able to move from conventional contracts to creating standard models of smart contracts. In Block Chain Technologies, the smart contracts turned into electronic-paper hybrids: confirmed in BLOCK CHAIN and made of paper physical copy. How Smart Contracts Change Our Lives Patrick Hubbard, Chief Product Marketing and Product Marketing Officer at Solar Winds, said: "Myanmar's Yangon Stock Exchange makes payments using a distribution log. Greater attention is drawn to the BLOCK CHAIN features emerging from the traditional use frame of this technique. In this way, they managed to solve the problem of accounts at different times, which synchronized trading twice a day. Thanks to intelligent contracts that automatically guarantee the execution of transactions. BLOCK CHAIN with its secured system is used in situations where complex operations involving variable factors are required. This is why companies such as Amazon, Microsoft Azure and IBM Bluemix are working on the development of cloud technology "BLOCK CHAIN AS A SERVICE" "How Smart Contracts Change Our Lives Smart Contract Disadvantages Smart contracts are far from perfect What if the code contains errors How can the state monitor these contracts The list of possible problems is not limited to this, but experts are trying to solve all the problems, but these difficulties keep potential users away from the BLOCK CHAIN, which can be contracted with a smart contract. BLOCK CHAIN Bitcoin: BLOCK CHAIN is excellent for homeowners, With limited documentation in it BLOCK CHAIN Side Chains: Another label BLOCK CHAIN NXT: BLOCK CHAIN is an open BLOCK CHAIN platform with a limited number of smart contract models.You can only use the existing one, you can not write your own contract. Open BLOCK CHAIN, which is the most convenient to write and handle smart contracts You can program any program, but you have to pay for ETH.

With the proliferation of block chain technology and the emergence of digital and encoded currencies such as etherium, we have a new term, "smart contracts". Smart Contract is a software that is encrypted and designed to facilitate, validate, and enforce agreements (contracts). With these intelligent contracts, the need for a lawyer, notary public, guarantor or any third party to sign the documents of the conventions can be waived, and there is no need to refer to a court or judicial body.

  Smart contracts rely on the so-called blockchain technology, and the whole process can be complementary or substitute for legal paper contracts. Contract terms are recorded in computer language in encrypted code.