You can’t turn around today without running into a story about blockchain technology and smart contracts.
In fact, one creative beverage company saw their stock climb 289% when they added the term “Blockchain” to their company name even though they have nothing to do with blockchain technology.
Blockchain technology is one form of a secure, distributed ledger of transactions.
In a distributed ledger, multiple copies of the secured information are geographically distributed and continuously synchronized, thereby providing redundancy, transparency, and (at least in theory) immutability. The data within each block is encrypted, but the existence of the block is visible to all participants. A distributed ledger can be a trusted source of truth in an untrusted environment.
The most well-known application of distributed ledger technology is the management of bitcoin and other cryptocurrencies.
However, the technology is also being used in a wide range of applications in which high-volume, secure, redundant, transparent record-keeping is critical. For example, Dubai is testing distributed ledger technology for health records, land title transfers, business registration, tourist engagement, and shipping.
What is a smart contract, anyway?
A smart contract (or smart agent) is a self-executing program that uses distributed ledger technology to store rules for a defined transaction, verify the request, and execute the agreed terms.
For example, a subisidary of RWE in Germany is running a smart contract prototype for electric car charging stations. The smart contract transfers payment for electricity used from the car owner’s digital wallet to the charging station provider. (“If electricity is used by X, then transfer €__ per kwh used from X to Y.”)
Here are a just a few examples of smart contracts that are in testing or in production today:
*** This is a Security Bloggers Network syndicated blog from The State of Security authored by Amy Grant. Read the original post at: https://www.tripwire.com/state-of-security/security-awareness/what-are-smart-contracts/