Smart contracts

Smart Contract Discussion Page

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By default, smart contracts are immutable, which means they cannot be removed or updated by anyone once deployed. It is possible for the smart contract’s developers to include (in the contract code) the ability to update functionality as a supported operation (e.g. this human-controlled address can rewrite the contract in the future). However, such an operation must be included in the smart contract’s code prior to the smart contract’s deployment (i.e. publication to the Ethereum network). Without the inclusion of updatability prior to deployment, a smart contract cannot be modified by anyone. It is also possible to revoke the ability to update functionality by transferring the permissions for this ability to a placeholder Ethereum address for which there is no corresponding private key. This placeholder is known as “the zero address.” Once the ability to update a contract has been revoked, it cannot be reclaimed and the contract can no longer be changed. --Reggie (talk) 07:51, 29 August 2022 (UTC)

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DeFi thus promotes trustlessness. It leverages permissionless blockchains and smart contracts to automate lending-borrowing, minimizing the need for intermediaries. DeFi protocols embed trust in code and algorithms, rather than vesting authority in the top management. And because the codebase is usually open-source, these protocols ensure transparency regarding the custody and utilization of funds. The risk of corruption is also minimal. Transactions are secure, even when the counterparties cannot trust each other. --Reggie (talk) 09:24, 11 August 2022 (UTC)

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What is a smart contract? A basic definition is: A smart contract is a tamper-proof program that runs on a blockchain network when certain predefined conditions are satisfied.

What does that mean? Smart contracts, simply put, are programs. The code is transparent and often immutable or unchangeable. Smart contracts are hosted and executed on blockchain networks. --Reggie (talk) 03:10, 24 July 2022 (UTC)

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Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met.--Reggie (talk) 07:37, 23 June 2022 (UTC)

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• Speed, efficiency and accuracy: Once a condition is met, the contract is executed immediately. Because smart contracts are digital and automated, there’s no paperwork to process and no time spent reconciling errors that often result from manually filling in documents.
• Trust and transparency: Because there’s no third party involved, and because encrypted records of transactions are shared across participants, there’s no need to question whether information has been altered for personal benefit.
• Savings: Smart contracts remove the need for intermediaries to handle transactions and, by extension, their associated time delays and fees.--Reggie (talk) 07:38, 23 June 2022 (UTC)

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Smart contracts work by following simple “if/when…then…” statements that are written into code on a blockchain. A network of computers executes the actions when predetermined conditions have been met and verified. These actions could include releasing funds to the appropriate parties, registering a vehicle, sending notifications, or issuing a ticket. The blockchain is then updated when the transaction is completed. That means the transaction cannot be changed, and only parties who have been granted permission can see the results.

Within a smart contract, there can be as many stipulations as needed to satisfy the participants that the task will be completed satisfactorily. To establish the terms, participants must determine how transactions and their data are represented on the blockchain, agree on the “if/when...then…” rules that govern those transactions, explore all possible exceptions, and define a framework for resolving disputes.

Then the smart contract can be programmed by a developer – although increasingly, organizations that use blockchain for business provide templates, web interfaces, and other online tools to simplify structuring smart contracts.