What Are Smart Contracts?

The smart contract–it’s a contract that functions like a business rather than, well, just a contract. Perhaps you fancy yourself a technical visionary (I know I do). If so, you’ll want to keep your eye on this emerging smart tech tool. It’s well on its way to profoundly changing how we do business.

Though smart contracts resemble traditional contracts–they both define rules and result in actions being taken–the similarities end here. Smart contracts are actually sections of code that are immune to security threats. They are also self-enforcing. You could think of them as contracts that multitask. They store the directives of the contract, then confirm and carry out those directives. 

A unique and efficient tool, the smart contract can manage financial aspects of the agreement and act as a mediator, holding all parties accountable the way a lawyer would. And it accomplishes this, thanks to cryptology.

Smart contracts are an application on blockchain, a chain of records (“blocks”) that are connected via cryptology. Understanding this about blockchain will help you grasp why smart contracts are so secure.

Blockchain itself is considered an immutable distributed ledger. This means that once a smart contract is loaded into the blockchain, it is nearly impossible to alter it. 

Distributed, in this context, refers to the absence of a central authority. All elements in the blockchain, including a smart contract, are held accountable by an entire network of databases (ie., the blockchain). Therefore, no intermediary is needed outside of the coded smart contract itself. 

Since the design of the smart contract allows you to cut out any middlemen, you save time, money and the hassle of adding additional people to the mix. This is why blockchain-based smart contracts are, across the board, more secure and less expensive than traditional contract setups. 

A key to the autonomous nature of smart contracts is their coding. Smart contracts can use algorithms to automatically respond to the parameters of the contract, such as when a milestone is reached or an incident occurs. For example, say a contractor finishes a project and sends an invoice. The smart contract is coded to respond with the agreed-upon action: issuing a payment to the contractor and notifying them of their next job or end of contract.

This also makes it difficult to alter smart contracts. The boundaries of the contract and all transactions related to it are coded into and made publicly available via a blockchain ledger. No one can go in and tweak the smart contract independently of a consensus from the blockchain. And once an alteration is made, every database in the blockchain is aware of it. 

Immutability is not the only reason smart contracts create a sense of security. Though the ledger activity is posted publicly on the blockchain and can be monitored, information about the clients or contractors remains private. The identity of the individuals is not shared. 

Entrepreneurs and business traditionalists alike will benefit from transitioning to this technology. Taking advantage of the security smart contracts offer will set you apart as a technical visionary. Embrace the future of business transactions through smart contracts.

Denis Bederov

The advantages of Blockchain Technology at a glance

A blockchain, simply put, is a computer file that is used for storing data. To go more in-depth, blockchain is a distributed open database. It is termed “distributed” in the sense that the information on the blockchain is distributed to several computers, and the entire blockchain is decentralized. Therefore, no single person has absolute control over the blockchain.

What is a Blockchain, Denis Bederov

 

Blockchain also can be seen as a time-stamped series of unalterable record of data which is managed by a collection of computers that are not owned by one individual. This blockchain does not have a primary authority; it is decentralized. The effect is that any information on the blockchain is free for anybody to see, thereby enhancing accountability and transparency.

Having explained the meaning of blockchain, I will explain some of the numerous advantages of blockchain technology.

 

Advantages of Blockchain Technology, by Denis Bederov

 

  1. Improved Transparency: One important advantage of blockchain technology is that it has greatly improved transparency for every systematic scientist. Due to the very nature of blockchain, it is distributed to all network contributors that use the same documentation as against individual ones. The data that is stored on the blockchain can be reorganized through agreement by unilateral acceptance of everybody involved in the transaction. Also, before any change or alteration can be made to a single record, there have to be changes made to previous records, and this must be approved by the entire network. The data is saved in a place that is accessible to everyone that has access to it. This makes the information saved on blockchain to be transparent, accurate, and consistent. The access to add or alter the data is available to individuals who have the requisite permission to do so.

 

  1. Speed and Efficiency: For a systematic scientist, speed is paramount to deliver an excellent job. Using the regular traditional means of storing data is not only time consuming but vulnerable to mistakes and errors. When you streamline and automate these procedures with blockchain technology, it becomes faster, less error-inducing and more efficient. The information stored on the blockchain is done using one digital ledger that is accessible to various users; it therefore dispenses with the need to harmonize different ledgers, and that makes the work less clumsy. It also encourages trust amongst co-workers, as everyone has access to the same data and it reduces the need for supervision.

 

  1. Reduces Cost: Reducing the cost of running a business is very important for a systematic scientist, so that funds can be used for more important projects. The cost that is incurred by manual documentation, errors, mistakes, and delays can be averted by using a cost-effective blockchain. Blockchain technology also helps you to eliminate unnecessary intermediaries, and third parties as members can now monitor and track information themselves. There is no longer a need for unnecessary document review because everybody that is involved in the particular transaction has access to the same unchanged data.

 

  1. Improved Security: Because most of the information used by a systematic scientist is confidential and private, sound security is a priority for them. The data stored on blockchain is usually encrypted and this improves the security of the data. Also, changes or alterations cannot be made on the blockchain, so it helps to secure the information from fraudulent manipulation and unauthorized activities. It is also advantageous to me as a space scientist, for it also reduces the incidence of hacking because the data is saved on several computers and not on a single server.

 

Blockchain, though a new concept, is gradually beginning to gain relevance and importance in areas like banks and other financial institutions. It is also used by entrepreneurs, IT specialists, and systematic scientists for effective data documentation. Being a new terrain, it is still developing and I might not be sure of the extent of protection, risks involved, privacy, and dispute resolution. However, I, Denis Bederov, insists that the advantages, as set out above makes it a good option to consider for a decentralized system of record.

 

More articles:

Revolutionary – The Industrial Internet of Things

The Internet of Things: What Will Come? 

How to come up with creative ideas that are worth a Patent

 

 

 

What technical revolution will be there in the next 5 years?

I think we all have to agree now that the rate of technological change is on the fast track – you blink, you miss. Every innovative trend is often tagged as “the next big thing.” The trends have become quite unpredictable and unprecedented, and with so many technologies emerging in every sphere of life, it might be quite challenging to keep up with everything.

 

7 technical Trends

 

Sometimes, I’ve been asked, “Denis Bederov, as a technical visionary, what trends do you think we should expect in the next years?” So here is a list of 7 technical trends that I believe will be at the forefront of industrial revolution in the next couple of years, especially till 2025.

 

  1. Bioplastics:

Bioplastics are environmentally friendly plastics derived from plant-based sources, such as cane sugar, corn or other byproducts of plants like wood bark and corn husks. Statistics show that less than 15% of the world’s plastic is recycled, with the rest incinerated, abandoned or dumped in a landfill. As they are generally compostable, bioplastics offer a solution for sustainability because of their low emission of greenhouse gases.

 

  1. Biometric technology:

Just like I, Denis Bederov, it might interest a scientist or any technical visionary that about 72% of companies are said to be planning to drop traditional passwords by 2025. The newer and stronger biometric authorization services for face, voice, eye, fingerprint, vein authentication and signature identification for accounts and devices are taking over.

 

  1. Virtual assistants:

Virtual friends and assistants are becoming a part of everyday life, and are being used increasingly to care for the elderly, educate children and undertake all sorts of tasks. New techniques that capture semantic relationships between words are making machines better at understanding natural language. These improvements, alongside better speech synthesis, has enabled us to move from giving AI assistants simple commands to having conversations with them. I think we are approaching a time when these virtual assistants will be able to deal with daily tasks like taking meeting notes, Internet searches or shopping online.

 

  1. Smarter fertilizers:

There have been recent improvements in the production of fertilizers, focusing on their ability to slowly release nutrients when needed in the soil. However, they still contain ammonia, urea and potash which are not environmentally-friendly. By the recent trends, a technical visionary can look forward to the manufacture of fertilizers, which use more ecologically friendly sources of nitrogen, and microorganisms that improve absorption by plants.

 

  1. Genomics:

Beyond now, genetic engineering technology is expected to increase with faster computer processing speeds. New DNA sequencing technologies and advanced analytics will improve agricultural production, reduce reliance on fossil fuels and ultimately extend human life expectancy.

 

  1. Blockchain:

Every technical visionary like I, Denis Bederov, will agree that blockchain is one of the biggest buzzwords in the world today. The hype seems to be growing by the day especially with its use in the cryptocurrency world. Blockchain allows parties to exchange secure information over standard networks. Far from its most common use in Bitcoin, in the coming years, blockchain is expected to drive more commercial uses and industrial applications because of its security.

 

  1. Internet of Things:

The number of devices currently connected to the internet is estimated to grow between 50 about 1 trillion in the next ten years. This means that every technical visionary can anticipate that the power of the cloud and widespread connectivity will ultimately make multiple devices safer, more efficient, and more responsive.

 

Conclusion Denis Bederov

So we can look forward to a lot of new things in the next five years. Above all, these 7 innovations only represent the top. The further developments in the automotive industry towards self-driving vehicles etc. would have blown up the frame. But in a future post, I’ll be happy to talk more about developments in this industry.

 

More articles:

What is BIG DATA exactly?

What you really should be proud of when it comes to your children
The blockchain technology for the financial wastelands – easily explained by Denis Bederov

The blockchain technology for the financial wastelands – easily explained by Denis Bederov

More and more often we hear the word “blockchain” or “crypto currency” in our everyday life. To understand that Blockchain is much more than the technology behind “crypto currency”, here is a simple metaphor: If you want to shape a piece of wood, plane, grind and file it, chips and dust are generated. The piece of wood is the blockchain and the chips, the waste product of this technology so to speak, are the crypto currencies.

Due to the hype and speculations in the field of crypto currencies, the market screamers are correspondingly loud here, which is why one is quickly tempted to completely forget the technology that is revolutionary. Let me tell you about the advantages of the blockchain, especially in the financial sector.

 

Current situation in the financial sector

 

Looking at the current state of the financial sector, you will probably know that the central bank is an institution where other banks in the financial sector can borrow and park money. This central bank, as its name implies, is centrally organized. 

Let’s go from the macro level to the micro level and to your wallet: What do you think makes your €10 bill worth €10? Is it the paper and the color? Is it unique and therefore worth 10€? NO! The only thing that makes your bill worth 10 € is trust. From you, from the supermarket cashier, etc.

In what form does this money still exist? Obviously there is money in your account, i.e. Fiat money, which can be seen in your online banking. 

 

What the blockchain enables for the financial sector

 

In contrast to the easily corruptible and hackable systems, the central administration, the blockchain is completely decentralized. Its storage locations are on every computer connected to it. Once it has been programmed for a specific process, it cannot be changed.

In addition, you do not enter the blockchain as a person, but with a personal ID. For example in contrast to a bank transfer, which bears your name, and exactly titles the name of the receiver, such a transaction is encrypted in the block and by your personal user ID.

 

The term “block”

 

A block is ultimately made up of several combined transactions. If the capacity of one block is fully used, the next block begins. To ensure that the correct sequence of blocks is recognized, each block receives a specific key code at the end. A subsequent block then begins with exactly this key code. This makes the sequence comprehensible for everyone.

This coding and security encryption can currently be guaranteed by two different methods: “Proof of Work” and “Proof of Stake”. I will explain these in more detail in another blog article.

 

Conclusion – Denis Bederov

 

You can see that the security loops and verification methods are logical. For this very reason, the confidence that crypto currencies enjoy as a small part of this technology is enormous, so many investors have included crypto currencies in their portfolios for risk diversification. Nevertheless, the journey is still a long one and only through complete regulation of this market will blockchain technology including crypto currencies gain a foothold in the financial market.

 

Here are some more articles:

How personal growth develops through role models

What does Denis Bederov, a space scientist, do in his spare time?

Familiar insights into the daily routine of the space scientist, Denis Bederov