Smart contracts are translations of an agreement including terms and conditions into a computational code (script).
Blockchain developers write the script in a programming language like Java, C++, etc.
We can consider that vending machine is implementing a smart contract mechanically.
The goals of the paper are to bring certification and secure digital documents using timestamps.
This first proposition has evolved, and technology such as blockchain appears and has permitted refinement of the first proposition.
For any given transaction, we can determine the computational time of its hash.
The best thing about the blockchain is that the technology uses decentralized hyper ledger that can leave out all the middleman in the system which exists now. You may have a question that what is Blockchain smart contracts? And it's use-cases. Let us get into that.
Smart contracts in an insurance policy
The major present issue in this medical sector is that the insurance claiming can take weeks or even a long time to be paid. The procedure is still exceptionally manual and requires a substantial level of human activity. This signifies plenty of regulatory costs, which result in higher premiums for clients.
Insurance agencies can robotize this claiming process by keeping in touch with them into a smart contract.
When the natural disaster is happening, for instance in case of a calamitous catastrophic event, the smart contract procedure is activated promptly.
How does it work?
Quantifiable parameters of the disaster occasion, for example, wind speed, an area of a sea tempest or extent of a tremor can be recorded onto the blockchain. Variable with the multifaceted nature of the smart contract, as the parameters cross certain pre-concurred edges, the insurance claiming procedure is activated promptly and the correct measure of money related payout can be conveyed without the requirement for human-driven mediation.
Not exclusively does the smart contract lessen the managerial expenses related with satisfying such arrangements; however, straightforwardness and trust in the process are obvious to all partners and every single administrative body involved.
Other than that, these are the areas where the smart contract can be applicable,
Copyrighted Product:
To ensure the originality of the copyright product or services. The smart contract is enabling customers to know that the specific product they are buying is an original one. It can be processed by the blockchain technology which stores the authenticity of the product in the network and accesses the information of the products when it is needed.
Intellectual property:
The contract can be executed in property rights. For example, if you are a music artist, you want to be paid directly without middleman means the contract is created with a definite set of rules. When the rules or compensations like money is given for your music, the contract is activated and the music is delivered to the user. In that way, you can protect your own work using smart contracts. No one can access the property without your permission.
Various real-life applications are using blockchain smart contracts to empower their business in an automated way. If you are in a need to build a smart contract based application, contact our experts' team. They will guide you to build a secured application in various industry like supply chain management, product tracking, payments, stock trading, digital identity, medical research, mortgage etc.
All of the real world applications have come true with the inventions of blockchain technology. Be a part in digital and empower the business.
If you’re new to all this cryptocurrency stuff, including smart contracts, ICOs, and TGEs (token generation events), check out our Guide to Blockchain Development to dip your toe in the water. If you find yourself wanting to learn more, look at the Ethereum Whitepaper.
If you already know what Ethereum and smart contracts are, but still have some points to clarify, then read on.
How does one make smart contracts and avoid mistakes? VironIT has experience in writing, testing, and deploying Ethereum smart contracts and its web interface. Over time we have collected questions and answers about smart contract development, so let’s dive right in!
I need pre-ICO and ICO. Should I have 1 or 2 contracts?
If the period between pre-ICO and ICO is short, it is more convenient to create a single smart contract for both pre-ICO and ICO.
If it takes more than a few months, then chances are everything will change considerably, to the point where you will have to create a new smart contract for the ICO phase.
Then the security issue must be considered. Two simple contracts are likely to be more robust than a large and complex one.
For example, project Hackspace Capital raised 18 000 ETH in September using one smart contract, and it worked perfectly for them (here is a video of an Ethereum Wallet our company recently finished for them).
Ethereum’s smart contracts are not easy to develop and are even more difficult to run and test, and the cost of failure is high.
Hackspace Capital is a platform established for investing in and developing early-stage technology hardware. It connects hardware startups identified by its strategic partner
How to update a deployed smart contract
Please note, Ethereum contracts are immutable. Once deployed to the blockchain, they cannot be updated. The only way to change the code is by destroying it altogether by the SELFDESTRUCT opcode (selfdestruct) (in solidity) and deploy everything again. Imagine how painful this could be having hundreds of backers already. You would have to mint all the tokens again, which may have a devastating impact on your online reputation and the whole ICO’s success.
How to write upgradable contracts in Solidity
To write an upgradable smart contract, you have to connect third-party libraries. However, using such contracts compromises security. This can be seen in the case with Parity, when about $150 million was locked in smart contracts delivered before 20 June 2017.
Some valuable functions to include in your Smart Contract
pause/unpause – to put on hold or resume token operations
setRate – to change token cost
mint – to charge tokens to the right address manually (for example, if you receive payment via bank transfer or in some other way)
changeOwner – to replace a contract holder
changeWallet – to replace an active wallet to receive tokens from a fallback function
How much can I raise? What are HardCap and SoftCap limits?
ICO is a limited time fundraising campaign. There are several variables that describe limits and time frames; these terms are hard cap, soft cap, and total supply.
Soft Cap is the minimum amount of funds required for the ICO to be considered successful.
Hard Cap is the maximum amount of funds raised. For example, if terms haven’t yet been reached, but the hard cap is already assembled, the company stops fundraising and project development starts.
Total supply is the total number of coins or tokens that are in existence, including those circulating in the public market and those that are locked or reserved.
Please consider the following points:
- What will happen with the unsold tokens at the stages of pre-ICO and ICO?
- What will happen if the soft cap is not achieved? How will they be refunded?
- Is it possible to issue additional tokens and, if so, on what conditions?
Should I limit token transfer?
Yes, you should. Please consider the following points:
- What is the amount of issued and mined tokens?
- Is there a limit on the release, as determined by the initial price of the tokens?
Be aware that a big player can derail the rate of your tokens on the stock exchange, buy them for next to nothing, and then resell them when the rate rebounds, so, it’s necessary to restrict the transfer of tokens in the pre-ICO / ICO and after the ICO period. But this will not resolve all the problems if you don’t make a right KYC, the process in which a business identifies and verifies the identity of its clients.
Token distribution
You should come up with a clear plan for the distribution of tokens, such as:
- 20% reserved for founders
- 15% for the purchase of data from data providers
- 60% goes on sale
- 2% for the Advisory Board
- 3% for the Bounty Program
Consider whether the distribution should be automatic or manual.
How to determine the start and end dates of pre-ICO/ICO
We advise you to avoid a fixed date for the start/finish in the smart contract. *hit happens and schedules shift.
That is why it is better to have manual control over the start and end of these events:
- Start pre-ICO / Stop pre-ICO
- Start ICO / Stop ICO
What’s the difference between utility and security tokens?
There are two types of tokens, utility tokens and security tokens.
Utility tokens drive the entire system. They allow one to develop features for the distributed ledger, access, and interaction with the system. They offer a vote in a meaningful way for free information and the possibility of exchanging opinions among token holders.
Security tokens represent a monetary investment in a startup, a share of profits, losses, assets, or liabilities. They offer status as an equity holder, creditor, or lender. Security tokens involve an expectation of profits consisting of dividends, periodic payments, and investment value. Profits are to be derived from the entrepreneurial or managerial efforts of others. Voting rights of the token holders don’t offer meaningful control over the startup.
For example, ICO Head Start uses utility token with a buyback program.
To summarize
Before working on contracts, you should consider their structure and regulation.
During contract development, you need to remember not only the typical techniques and programming issues, but also about the specifics of the blockchain. A thorough automated testing, auditing of contracts, as well as their code verification are all helpful and necessary to prevent errors from creeping into the contracts. Finish the development stage no later than 7 days before launch to give yourself enough time to ensure the code is faultless.
Whether you are a start-up or business seeking the help of an expert ICO advisor, VironIT will provide you with the means you need to take advantage of the crypto market.
Let us know if this article helped you or if you have any doubts. Please leave comments below if you have any questions.
Smart contracts are necessarily contracts which are written in codes. These are deployed on the Blockchain Platform. The smart contracts are self-executing, codes that also negotiate, enforce transactions or even actions.
Once deployed on the blockchain platform, it is impossible to edit or manipulate them at any cost. Not even the admin who created it can tamper the codes. Hence it is highly essential to check the codes before deploying the codes.
How did I audit my smart contracts?
I straightaway went to Blockchain Firm, the smart contract security auditing company that leads the industry. They have six standard methods to audit any smart contracts that we give them.
- Manual smart contract security audits
The auditors run through the codes manually and check for potential vulnerabilities.
- Automated security audits
The auditors run a program on the smart contract codes and figure out the mistakes.
- Unit testing
For every function, the auditors write test cases and check if it functions the way it has to.
- Bug Bounty
The team launches a bug bounty program in the community where the developers who resolve the issues are rewarded.
- End report
The developers deliver the end report that consists of the bugs and places to be fixed.
I strongly recommend Blockchain Firm, if you are looking for smart contract security audits.
