Smart Contracts and Smart Property

“Money is not the only valuable thing that we can put into a blockchain.”

Smart Property

As per Satoshi Nakamoto years before bitcoin, his design of blockchain could be forked to be compatible with variety of transaction types. These transactions could be: bonded contracts, escrow transactions, procurement, public records, vehicle registration, land titles, patents, crowdfunding and many more. Smart contracts falls under the Blockchain 2.0 technology. While Blockchain 1.0 is for decentralization of cash, currency and payments, Blockchain 2.0 is for decentralization of contracts and different kinds of non-currency asset. Smart Properties are encoded digitalized assets that is put in the blockchain. Digitalized assets could be a physical hard asset like: land, house, car. There are also intangible assets: patents, domain names or copyrights.

Smart Contracts

By definition, a contract is an agreement between parties in exchange of something. Dealing with contract with other people is like, the other person has an obligation or promise that must be fulfilled at a certain period or condition. Smart Contracts works the same way but it is digitalized and more secure in a sense that it lives in a blockchain. The idea of Smart Contract is derived from the Smart Property. Smart Contracts are transactions distributed in the blockchain like cryptocurrency. The difference of Smart Contract from cryptocurrency is, it has broader feature like, there is an instructions embedded into it. With smart contracts, anyone can create an agreement with people using a cryptocurrency to fund the instructions from the contract and distributed to a blockchain.



Example:

Scenario 1:

A rich old man wants to give all his assets to his favorite grandchild. Fortunately the old man has a programmer son and created a smart contract for his idea. The programmer created a smart contract that lives in a blockchain. This contract contains instructions like:

//API call to a government registry

deathCertificate = service.get(‘http://census.gov/api/v1/?q=deathcert&name=grandpa.name’).toString();

if(deathCertificate == true){
funder();
}
//18th birthday of favorite grandchild
if(date() == ’2030-07-01’){
funder()
}
funder(){
release fund to ethereum address: 0xF341j1if1231;
}

The idea of this instructions means that if the rich old man is dead(which could be verified by the API call to government’s web service), release 1000 ether to the grandchild’s ethereum address. Or if the grandchild reached her debut or 18th birthday, release 1000 ether to grandchild’s ethereum address.

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