All of us are familiar with the vending machine, which is found almost everywhere. This is a simple yet effective smart contract example to understand how it works. You make your choice in the machine, put in the money, and outcomes your milkshake. Instead of this, if you had gone to a regular store, you will need to interact with the cashier. This applies to all the valuable exchanges which happen in our life. If you need a document or an agreement to be prepared, in real life, you will have to take the services of a lawyer, pay them a fee, and get the document from them. But this is not the case with smart contracts. In a traditional contract, there are agreements, rules, and penalties. But in a smart contract, the penalties are automatically meted out to the defaulters. As there are several blockchains that offer the feature of smart contracts, it might be confusing to identify the best one, especially if you are new to the world of blockchain.
Irrespective of whether you are a beginner or an advanced learner, this article will prove to be useful to you as it will throw light on the current top 5 blockchain-based smart contract platforms.
Understanding Smart Contracts
So, what exactly is a smart contract? It refers to a self-executing contract where the terms of the agreement between the buyer and the seller are directly written into lines of code. The code and the agreements are contained therein exist over a distributed, decentralized blockchain network. Smart contracts allow for trusted transactions and agreements to be carried out among anonymous parties without the need for a central entity, external enforcement mechanism, or legal system. This way, the transactions are transparent, irreversible, and traceable. Implementing smart contracts across various blockchains is made possible through Solidity the high-level object-oriented programming language.
American computer scientist Nick Szabo was the first to propose the concept of smart contracts in 1994. He invented a virtual currency called ‘Bit Gold’ in 1998, ten years before the invention of the Bitcoin by Satoshi Nakamoto, the anonymous inventor of Bitcoin. Szabo is even rumoured to be the real Satoshi Nakamoto, which he has denied. Szabo defined smart contracts as computerized transaction protocols executing the terms of the contract.
What Smart Contracts Can Do
- Manage agreements between users.
- Function as multi-signature accounts so that fund spending will happen only if a certain percentage of people agree.
- Provide utility to other contracts.
- Store information about applications, such as membership records or domain registration information.
Best 5 smart contract platforms
Let us now take a deeper look at the blockchain platforms which are best-suited for designing smart contracts. This will help you understand what sets them apart.
1. Hyperledger Fabric
Hyperledger is an open-source, global collaboration that is hosted by The Linux Foundation. Using this, one can create and develop enterprise-grade, distributed ledger frameworks to support business transactions. It was launched in 2016 with a technical and organizational governance structure and comprises of 30 founding corporate members. It makes use of a modular approach to build blockchains, and this helps companies develop what works best for them. It has attracted big companies such as J.P.Morgan, IBM, Intel, and Samsung. More than software, Hyperledger is a project framework.
Hyperledger Fabric is hosted under the umbrella of The Linux Foundation. It is a blockchain framework that aids in developing applications or solutions with a modular architecture. It supports the plug-and-play version of membership services and consensus. It leverages container technology known as ‘chaincode’ to host smart contracts. Hyperledger Fabric has proved itself as an outstanding smart contract platform and as a feasible option. It is co-developed by IBM, and since it is a permissioned blockchain, it is possible to execute smart contracts or chain codes using hyperledger fabric. It means that all the identities of all the participants of the network will be known. This is perfect for companies aspiring to create smart contracts. But they have to adhere to data protection laws. Like in Ethereum, hyperledger developers use a set of helpful tools which include Hyperledger Composer, tools based on javascript, that helps developers create smart contracts conveniently. Blockchain developers can use javascript, Go, and other common programming languages too for developing smart contracts. This makes hyperledger more flexible.
2. NEM
NEMrefers to a peer-to-peer cryptocurrency and blockchain platform that was launched on 31 March 2015. It has now become the first choice of many developers as it is written using java, which is one of the widely used programming languages in the world. It is easily accessible, and it is not mandatory for developers to learn a platform-specific programming language like Solidity. As per experts, the recently launched Catapult or Mijin v.2 update by NEM renders it as the safest smart contract platform across the globe. It is highly scalable. While Ethereum can process 15 transactions per second,NEM manages to process a 100. These features make NEM the best choice for developers.
3. Waves
Waves is an open-source platform launched in June 2016, which mainly focuses on dealing with existing obstacles that come to the way of mainstream blockchain implementation, particularly speed and scalability. In the waves ecosystem, smart contracts enable changing the default behaviour of accounts and assets. It is not considered a separate entity, it cannot be called, and it cannot call another smart contract. It is considered an ideal platform for smart contracts and Initial Coin Offerings (ICO). Waves blockchain has also created its own identity for making token operations possible.
4. Ethereum
Ethereum provides a decentralized machine called the Ethereum Virtual Machine (EVM) which executes scripts using an international network of public nodes. The ethereum community is regarded as the largest and most active blockchain community across the globe. It includes app developers, core protocol developers, mining organizations, Fortune 500 companies, ordinary users, etc. The beauty of Ethereum smart contracts lies in the support and standardization it offers. Developing smart contracts in Ethereum is easy and less risky as the rules a developer needs to adhere to are clearly published. Though Ethereum has the biggest market capitalization among all the smart contract platforms, it is investing more to improve the development and operation of smart contracts. For this purpose, it has built Solidity, its own smart contract programming language. In spite of some security issues and bugs in its code, Ethereum smart contracts are widely regarded as the best choice for developers.
5. NEO
NEO, is, no doubt, one of the most recognized blockchain projects in China and Asia. It offers the opportunity to execute trustless smart contracts. Similar to Ethereum, in addition to being used for financial transactions, it can also be used as a platform for complicated transactions. It is regarded as ‘China’s Ethereum Killer.’
The features which distinguish it from Ethereum are:
- NEO enables developers to write languages that are already known. So, it makes it easy to write smart contracts.
- It uses a proof of stake system with delegated Byzantine Fault Tolerance (dBFT) instead of the proof-of-work algorithm used by Bitcoin and Ethereum, which needs a lot of computing power.
- It has two tokens called NEO, which is the main token on the platform, and GAS, an automatic creation that comes about when NEO is held in a wallet which is officially approved.
Overall, NEO is a user-friendly platform, and hence building smart contracts is made simple.
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