## Abstract
Smart Contracts are computer codes which are used in distributed ledger technology called ‘Blockchain’. These are self-executing contracts which can be used to automate activities in different sectors like Banking, Real Estate, Democratic public voting, Music industry, etc. Here, in this article, we will find how Smart contracts can be made more wise and useful using Artificial Intelligence.
## Introduction
In 2008, a pseudonym named “Satoshi Nakamoto” created Bitcoin which created a revolution in Cryptocurrency ecosystem. People were really excited about this new innovation in financial sector.
The Bitcoin network is a decentralised peer-to-peer network that, ideally, is both distributed and diverse. The more widely the peer-to-peer nodes are distributed, the more decentralised the network. The more diverse (non-similar) the nodes are, the broader the representation of the network and, hence, it is more resilient and secure. The Bitcoin protocol is designed to seek consensus amongst nodes, and greater decentralisation means a healthier, more robust network. All of these factors contribute to a more valuable blockchain.
After its successful operation for years, many developers and tech entrepreneurs felt the need of such technology in other applications as well. This led to the birth of “Ethereum”, a public permissionless decentralised peer-to-peer network which can be used for any kind of trust-based operations. Unlike Bitcoin, Ethereum holds the ability to develop smart contracts (self-executing code) which can be used to take decisions based on reasoning and henceforth, replaces middleman companies.
Ethereum is a decentralised system that exists between all permitted parties, there’s no need to pay intermediaries (Middlemen) and it saves you time and conflict. They are undeniably faster, cheaper, and more secure than traditional systems, which is why banks and governments are turning to them.
## Smart Contract
Smart Contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way, while avoiding the services of a middleman. E.g. The best way to describe smart contracts is to compare the technology to a vending machine. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account.
Some properties of Smart Contracts are listed below:
* *Autonomy* – You’re the one making the agreement; there’s no need to rely on a broker, lawyer or other intermediaries to confirm. Incidentally, this also knocks out the danger of manipulation by a third party, since execution is managed automatically by the network, rather than by one or more, possibly biased, individuals who may err.
* *Trust* – Your documents are encrypted on a shared ledger. There’s no way that someone can say they lost it.
* *Backup* – Imagine if your bank lost your savings account. On the blockchain, each and every one of your friends has your back. Your documents are duplicated many times over.
* *Safety* – Cryptography, the encryption of websites, keeps your documents safe. There is no hacking. In fact, it would take an abnormally smart hacker to crack the code and infiltrate.
* *Speed* – You’d ordinarily have to spend chunks of time and paperwork to manually process documents. Smart contracts use software code to automate tasks, thereby shaving hours off a range of business processes.
* *Savings* – Smart contracts save you money since they knock out the presence of an intermediary. You would, for instance, have to pay a notary to witness your transaction.
* *Accuracy* – Automated contracts are not only faster and cheaper but also avoid the errors that come from manually filling out heaps of forms.
Jerry Cuomo mentions a few examples related to the applications of smart contracts deployed on Blockchain. For instance,
***Government*** -– During Election, there are chances that the votes may be rigged. In current system, there is an election commission which is responsible for fair conduct of voting, relying on Electronic Voting Machine (EVM). This machine can be hacked very easily by experts. In order to hold a secure voting system, we need the help of Blockchain technology. Here, people can vote the candidate and the data will be stored in a distributed ledger. Hence, making Public voting system a hacking-proof.
***Management*** -- The blockchain not only provides a single ledger as a source of trust, but also shaves possible snarls in communication and workflow because of its accuracy, transparency, and automated system. A blockchain ledger streamlines these - business operations have to endure a back-and-forth while waiting for approvals and for internal or external issues to sort themselves out.
***Automobile*** -- There’s no doubt that we’re progressing from slothful pre-human vertebrates to super-smart robots. Think of a future where everything is automated. Google’s getting there with smart phones, smart glasses, and even smart cars. That’s where smart contracts helps. One example is the self-autonomous or self-parking vehicles, where smart contracts could put into play a sort of ‘oracle’ that could detect who was at fault in a crash; the sensor or the driver, as well as countless other variables. Using smart contracts, an automobile insurance company could charge rates differently based on where, and under which, conditions customers are operating their vehicles.
***Real Estate*** -- You can get more money through smart contracts. Ordinarily, if you wanted to rent your apartment to someone, you’d need to pay a middleman such as broker or a newspaper to advertise and then again you’d need to pay someone to confirm that the person paid rent and followed through. The ledger cuts your costs. All you do is pay via bitcoin and encode your contract on the ledger. Everyone sees, and you accomplish automatic fulfillment. Brokers, real estate agents, hard money lenders, and anyone associated with the property game can profit.
***Healthcare*** -- Personal health records could be encoded and stored on the blockchain with a private key which would grant access only to specific individuals. The same strategy could be used to ensure that research is conducted via HIPAA laws (in a secure and confidential way). Receipts of surgeries could be stored on a blockchain and automatically sent to insurance providers as proof-of-delivery. The ledger, too, could be used for general health care management, such as supervising drugs, regulation compliance, testing results, and managing healthcare supplies.
To be continued....
Part 2 coming soon....
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