The Power of Smart Contracts on the Blockchain

Visual Capitalist  |

The world is waking up to the impressive capabilities of the blockchain.

As a foundational technology that things can be “built on top” of, the potential applications of the blockchain go way beyond just payments or cryptocurrencies. In fact, the blockchain could revolutionize how we interact with intellectual property, capital markets, insurance, healthcare, government, and many other sectors.

In particular, an exciting enabler of blockchain technology is the concept of self-executing “smart contracts”.

Today’s infographic comes from Etherparty, a smart contract creation tool, and it helps provide a welcoming introduction to how smart contracts work on the blockchain.

Smart contracts are going to change everything from the legal industry to the backbone of the stock market.

Here’s how these self-executing contracts actually work.

Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. Built upon the blockchain, a smart contract is usually:

Using the Ethereum platform, smart contracts can be programmed using basic logic. On the most basic level, they can:

But most importantly, it is important to know that smart contracts are autonomous. They are not controlled by anyone – instead, they self-execute based on a set of instructions that two parties have agreed to (ie. the code).

Smart contracts are appealing for a variety of reasons:

The blockchain is already a disruptive technology, and with these benefits – the potential behind smart contracts is another facet to be excited about.


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