Ledger: Working of Blockchain Smartcontract - Article

A Blockchain Smartcontract is just a digital contract that has blockchain security code. It contains certain instructions and permissions defined in code that need to happen in a specific order in order to for the smart contract's terms to be accepted. 

In the contract, deadlines may be included due to time restrictions. Every smart contract has a blockchain address. The contract may be interacted with by using its address provided the contract has been broadcasted on the network.

Idea behind smart contracts:

Logic of the Blockchain Smartcontract is pretty simple. They are executed on a basis of simple programming logic, IF-THEN condition.

Example: 

• IF you send object A, THEN the sum (of money, in cryptocurrency) will be transferred to you.

• IF you transfer a certain amount of digital assets (cryptocurrency, for example, ether, bitcoin), THEN the A object will be transferred to you.

• IF I finish the work, THEN the digital assets mentioned in the contract will be transferred to me.

Note: The WHEN constraint can be added to include the time factor in the smart contracts. It can be seen that these smart contracts help set conditions that have to be fulfilled for the terms of the contract agreement to be executed. There is no limit on how much IF or THEN you can include in your intelligent contract. [0]

Operation of a blockchain smartcontract: 

Predefined Contract: Multiple parties identify the cooperative opportunity and desired outcomes and agreements could include business processes, asset swaps, etc.

Events: 

Set conditions: Smart contracts could be initiated by parties themselves or when certain conditions are met like financial market indices, events like GPS locations, etc.

Code business logic: A computer program is written that will be executed automatically when the conditional parameters are met.

Encryption and blockchain technology: Encryption provides secure authentication and transfer of messages between parties relating to smart contracts.

Execution and Settlement: In blockchain iteration, whenever consensus is reached between the parties regarding authentication and verification then the code is executed and the outcomes are memorialized for compliance and verification.

Blockchain updates: After smart contracts are executed, all the nodes on the network update their digital ledger to reflect the new state. Once the record is posted and verified on the blockchain network, it cannot be modified, it is in append mode only.

Cited Source:

 [0] - https://www.geeksforgeeks.org/smart-contracts-in-blockchain/

Ledger: Features of Blockchain Smartcontract - Article

 

Distributed Ledger Smartcontracts:

These are very simple programs with conditions in it, stored on blockchain to run till the condition is met. This digital program used to automate the execution of an agreement between the parties allowing them to perform successful transactions without any involvement of central authority / agency. 

While I was checking through the Internet on the Features of Smartcontract, I have come across below list of points and they are unique in a way based on my understanding when compared with smartcontracts controlled central governing authority / agency.

Below are the few of the Features of Ledger Smartcontracts:

Immutable: Once deployed smart contract cannot be changed, it can only be removed as long as the functionality is implemented previously.

Distributed: Everyone on the network is guaranteed to have a copy of all the conditions of the smart contract and they cannot be changed by one of the parties. A smart contract is replicated and distributed by all the nodes connected to the network.

Transparent: Smart contracts are always stored on a public distributed ledger called blockchain due to which the code is visible to everyone, whether or not they are participants in the smart contract.

Secure: Smart contracts can only perform functions for which they are designed only when the required conditions are met. The final outcome will not vary, no matter who executes the smart contract.

Some of the other Characteristics of ledger smartcontract:

Autonomy: There is no third party involved. The contract is made by you and shared between the parties. No intermediaries are involved which minimizes bullying and grants full authority to the dealing parties. Also, the smart contract is maintained and executed by all the nodes on the network, thus removing all the controlling power from any one party’s hand.

Customizable: Smart contracts have the ability for modification or we can say customization before being launched to do what the user wants it to do. 

Trustless: These are not required by third parties to verify the integrity of the process or to check whether the required conditions are met.

Self-verifying: These are self-verifying due to automated possibilities.

Self-enforcing: These are self-enforcing when the conditions and rules are met at all stages.

These features alone are not making Smartcontracts unique in the blockchain technology, Features along with Capabilities are main backbone for the distributed smartcontracts. I have posted an article on Capabilities for more information - "Ledger: Capabilities of Blockchain Smartcontract - Article " 

Source: 

[0] https://www.geeksforgeeks.org/smart-contracts-in-blockchain/