- Definition of blockchain and its basic principles
- Digital blockchain platform
- What are smart contracts and how do they work?
- Blockchain technology and contracts
- Using smart contracts in various industries
- Examples of successful projects using blockchain platforms and smart contracts
- Cryptocurrency of a blockchain platform
- The future of blockchain platforms and contracts
In recent years, blockchain and smart contracts have become some of the most discussed and promising innovations. The term “blockchain platform” can be interpreted in two ways. On the one hand, it is often interpreted as the blockchain itself, that is, a data storage system. On the other hand, a platform can be defined as a platform that people can use to access the technology’s capabilities, such as buying and selling crypto, generating passive income, creating smart contracts, and completing many other tasks. Additionally, there are blockchain development platforms where developers can create their own networks.
Here, we will use the term “blockchain platform” as a synonym for blockchain.
Definition of blockchain and its basic principles
Blockchain is defined as a distributed ledger that stores information in the form of a chain of blocks. Each of the blocks contains information about a set of transactions that are validated and added to the chain using consensus algorithms. The basic principles of blockchain include decentralization, transparency, security, and immutability.
Digital blockchain platform
Nowadays, there are many blockchain platforms such as Ethereum, EOS, Hyperledger, and others. Each of them has its own features and is designed for different purposes. Before designing a new platform, its developers first determine its purposes, mission, and tasks. For example, Ethereum was built to bring change to the global financial system by using blockchain technology to create smart contracts and Ether. Its major achievement was the introduction of smart contracts that are scheduled to be executed at a specified time, in a secure manner, without third-party interference.
The main differences between blockchain platforms lie in their architecture, consensus protocols, programming languages, and smart contract development capabilities. Each platform has its pros and cons.
For example, smart contracts made Ethereum the most popular platform for building financial systems, but this blockchain has an inherent scalability issue. EOS, on the other hand, offers high scalability but may be less decentralized.
What are smart contracts and how do they work?
A smart contract is basically a program that is automatically executed when certain conditions are met. It allows two or more parties to conduct transactions without intermediaries. Smart contracts are based on “if/else” statements where certain conditions trigger certain actions.
Smart contracts help conduct automated, secure, and transparent transactions. They eliminate the need in third parties and reduce the risk of fraud and error.
Blockchain technology and contracts
Blockchain contracts play an essential role, as they define the rules and terms of transactions. A smart contract is simply a program that is executed when specified conditions are fulfilled. It ensures the reliability and security of a network. For example, services can be automatically paid for when they are provided.
Using smart contracts in various industries
Smart contracts can be applied in many areas. So far, the most popular applications are finance, logistics, healthcare, and public administration (voting technologies). In finance, for example, they can be used to automate payments and manage assets.
Examples of successful projects using blockchain platforms and smart contracts
Ripple — using smart contracts for enabling instant payments
Ripple is a blockchain platform that uses smart contracts for instant cross-border payments, helping to make money transfers faster and less expensive.
IBM Food Trust — using multi-party contracts for food traceability solutions
IBM Food Trust is a project that uses multi-party contracts to track food from farms to stores, ensuring transparency and security in the food industry.
Maersk and IBM’s TradeLens — using smart contracts for automated logistics processes
Maersk and IBM TradeLens is a project that uses smart contracts to automate logistics processes, improving the efficiency and reliability of cargo delivery.
Cryptocurrency of a blockchain platform
A cryptocurrency is a virtual currency that is used as a digital means of payment within a blockchain platform. It is issued in a decentralized system and its own mechanism for validating transactions. This type of currency is not regulated by banks or governments. The cryptocurrency network operates thanks to users whose computers validate and store transaction data.
A cryptocurrency is tied to a specific blockchain (for example, Ether and Ethereum). However, this blockchain is used for various platforms that can have their own cryptocurrency, such as games using their own gaming tokens.
The future of blockchain platforms and contracts
New blockchain platforms appear all the time. Some take off, but many remain unknown and fade into oblivion. Blockchain technology continues to evolve and find new applications in various industries. It is expected to be even more widely used in finance, healthcare, government services, and more.
Blockchain opens the door to new types of contracts, such as AI smart contracts or contracts with automatic fulfillment of terms.
Blockchain platforms and smart contracts have enormous potential to improve efficiency, security, and transparency across various industries. They have already found applications in many areas, and the future of blockchain holds promise of even more innovation.
