In today’s modern world, business people started to develop their products using blockchain technology. This technology reduces your work and increases your trust. The use of smart contracts in blockchain-based platforms mostly avoids the need for third parties.
In this blog, we discuss about developing Ethereum smart contract and how to create an ERC20 smart contract for your business. before that let us discuss what is a smart contract, the working principle, and how blockchain used in smart contracts.
What is a smart contract in blockchain?
The smart contract is founded by Nick Szabo in 1994. He is a computer scientist and a cryptographer. The smart contract is similar to the contracts in the real world. But the smart contract uses computer programs inside the blockchain technology.
It stores all the rules of negotiations in terms of the agreement. Then it automatically verifies fulfillment and executes the agreed terms.
The smart contract avoids the third-party intermediate during the transaction. So the parties can transact directly. Only the parties agreeing can process the transaction. It is the main concept of smart contracts.
The implementation of smart contracts takes place in decentralized platforms. Whereas in a centralized platform, there will be intermediate. Also, they monitor your transactions. In the crowdfunding platform, startups or entrepreneurs share their projects with investors to achieve their goals.
But if you are sharing your projects in a centralized platform then you should pay a fee for intermediate. Investors also need to pay a fee to the mediator. But by using the smart contract we can avoid such third parties. We can trust the smart contract because it is distribution and immutable.
Using a smart contract, startups can directly connect and transact with investors. If the project got successful, then the raised money will automatically go to startups. If the project fails, then it automatically goes to investors. Considering the smart contract is inside the blockchain. The storage of information or data in a distributed manner.
How does it work?
If you want to understand how a smart contract works, let’s see an example. If you want to sell a property, house or some other applicants. Then you should find a buyer with a third party or broker. The process of selling properties is hard. The process of paperwork and documentation takes a lot of time. Also, while selling a property you may cheat by fraud.
Currently, most of them sell their properties through real estate agents. These real estate agents take care of all the activities related to selling property. Such as paperwork, negotiations, agreement, and documentation. They act as a mediator for both the buyer and seller for selling the property.
Therefore you cannot rely on the buyer. So real estate agencies provide escrow services while transferring money from one party to the other. After finalizing the deal, the buyer and seller should pay the fees to real estate agents in the name of a commission charge. So it leads to a loss of money.
When you use a smart contract, it reduces the burden of the agent. Smart contracts are designed to figure out condition-based principles. which can resolve the ownership issue by transferring it to the customer only the monetary. also, as other conditions are prescribed. the smart contract also replaces the escrow services.
The performance of all works by the agent to code in a smart contract. It reduces the time and money of buyers and sellers. smart contracts work on this mechanism. So developing smart contract is more important to blockchain-based industries.
How blockchain technology is used in smart contracts?
There are many smart contracts implement with blockchain technology. But bitcoin and Ethereum are the prominent Blockchain technology in smart contracts. We already know bitcoin and Ethereum is a cryptocurrencies. The implementation of the ERC20 token is also with the smart contract. Let us discuss the ERC20 smart contract.
ERC20 smart contract
Ethereum is a blockchain-based platform and a type of cryptocurrency. Ethereum blockchain is a peer-to-peer decentralized platform. We can avoid fraudulent activities, hacker control, and intermediate third parties by using the Ethereum smart contracts and decentralized applications.
The Ethereum blockchain stores the transaction information of the users and traders. The transaction, it involves the source code and Ethereum smart contract.
ERC20 is a token and it is a kind of digital asset acquired from the Ethereum blockchain. ERC20 is used for buying, selling, and trading on the crowdfunding platform. These tokens are borrowed from the existing Ethereum blockchain. So a new blockchain is not required.
The most popular Ethereum token in the Ethereum blockchain is ERC20. In the crypto world of 2020, Ethereum smart contracts are ERC20. For developing a single ERC20 token there are certain rules and conditions for developers.
Only after satisfying conditions, the developers can Create ERC20 token. Those conditions and regulations are coded in a smart contract. ERC20 smart contract takes place in crowdfunding platforms.
What are the benefits of using a smart contract?
When we use smart contracts in our business there are some benefits they are
- More trust
- Distributed and immutable
- Paper-free
- Avoidance of fraudulent activities
- savings
- Record keeping
- Accuracy
- Buyers and sellers can have a direct connection
- No need for third parties
- Transparency
- Storage and backup
- Resistance to failure
- security
- Cost efficiency
- Clear communication
- Speed
- Promised outcomes
Use cases of a smart contract
As for now, many industries started to use smart contracts and blockchain technology. Some of the industries that use smart contracts in blockchain technology are
- Banking & Finance
- Logistics
- Supply chain
- Health care
- Food safety
- Real-estate
- Identity management
- Fundraising
- Government
- voting
- Legal issues
- Internet of things(IoT)
Where to develop a smart contract?
There are plenty of smart contract development companies available. If you are the person looking to get an ERC20 smart contract with highly secured blockchain technology. ZAB Technologies Pvt Ltd is one of them delivered more than 60 blockchain products to our international clients.
Without developing a smart contract, we can not have any computer-coded agreement or security during the transaction. We people at ZAB Technologies will provide you with world-class smart contract blockchain technology at an affordable price.
Closure
However, there will be a huge demand for developing Ethereum smart contract in the future. Now only some people are getting to know about blockchain technology and smart contracts. In the future, many industries will integrate smart contracts with blockchain technology to reduce time and increase trust. Even many new tokens and games can be generated using Ethereum smart contract development.
