Different blockchains and functions implement different consensus mechanisms.
To put it simply: a smart contract is a digital contract. But unlike your average contract, smart contracts exist on a blockchain and have a preset list of terms and conditions that regulate a specific transaction. These conditions are immutable, meaning you cannot change or violate once you agree to them. They’re also distributed, meaning all involved parties share access and control.
Since all parties can see the smart contract, all parties know when someone attempts an invalid action. And the collective won’t validate that action, so it never appears on the blockchain. Smart contracts can automate bank deposits, insurance claims, employment contracts, legal contracts, copyrights, mortgage loans, and more.
Many smart contracts are already in place. For example, a broker or a lawyer wouldn’t need to be involved in verifying agreements. In other words, a digital record sometimes already has a digital signature.
Blockchain technology by no means ends there, but to understand the blockchain fully, you must first understand how it applies to you and your life.
Real World Blockchain Applications
A common misunderstanding is that blockchain is just one system for verifying transactions or holding, trading or spending cryptocurrency.
However, blockchain is a jumping off point. This technology foundation opens up the possibilities to build new social and economic models in our world. People, companies and organizations, bots, computers, and algorithms will be able to exchange information and transact in real time—independently of politics and conflict.
How to Use Blockchain
Take a moment and think about your life. Consider what types of transactions you make each day, week, month, and year. Think about how you currently store your data. Your medical records, financial information, legal documents, and even personal identity information.
Take note of your answers to the above questions and answer this final question: who owns and controls this information? Blockchain offers the possibility to take the ownership out of the hands of centralized organizations and place it back in the hands of the actual owner.
How will you be impacted by blockchain, and what can blockchain do for you? These are many applications of blockchain technology that can benefit everyday life. Here are a few examples.
Basic transactions using cryptocurrency can be done on the blockchain by submitting a request and waiting for it to be validated. If you are looking to exchange goods or services that would benefit from having a long lasting ledger, the blockchain is an excellent means to do so safely and securely.
With centralized banking systems, the consumer is dependent on the bank to complete and record any and all transactions that you would want or need to conduct at all times. Additionally, there is a dependency on the teller to provide correct information, the ATM to function correctly, the online banking app to run smoothly; the list goes on.
Blockchain information means that you no longer have to trust third parties. It eliminates the middleman. First shifting authority to the collective eventually brings the power and responsibility back to the individual. Coins, like Akoin, are popping up to level the banking playfield in countries with less access to banking.
When looking to shop mindfully and ethically, blockchain technology can track goods right to the source by following a chain of information. Imagine what record keeping of this sort could do to transform corrupt or exploitative industries.
It also forces suppliers and employers to be transparent about how they create their goods. This would ensure fairer compensation for manufacturers, too. Which has the potential to end the exploitation of workers making less than a minimum wage, or in unfair and unjust working situations. For example, a new blockchain tool for appraising diamonds seeks to end blood diamonds and make purchasing ethical again.
Blockchain Crowdfunding or ICOs
Crowdfunding is a tool to help innovator