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Cryptocurrency

How Smart Contracts And Ethereum Work?

written by Vaibhav Sharma | Oct 22, 2020
smart contract

The world that we live in is highly driven and dependent on technology. The dependence has increased to such an extent that it has started replacing the manual operations that are involved in many processes by automated digital solutions. Smart contracts development services and Ethererum application development services are two of the most trending concepts in the year 2020. 

This article aims to clarify both of them in a detailed manner. Also, it states the importance of Ethereum blockchain development company and the role of smart contracts. 

Need for Smart Contracts

Let us first start by taking an example to develop a better understanding of the concept. Suppose you need to buy a house. In this case, the buyer (you) will need to go through a series of formalities that includes heavy documentation. Not only this, but it also includes communicating with various parties for the mentioned purpose and involves various kinds of risks that are associated with the complete process. 

Processing all the activities that are stated above brings the role of various intermediaries like the real estate agents, finance agents and many more. Furthermore, the financial transactions that are involved in buying the property are not petty, but instead big enough that demands utmost security. 

The process does not end even after the deal is closed as the agents from the buyer’s as well as seller’s side come into the role of splitting the commission. It not only increases the costing of the property of the buyer (you) but also results in a financial loss for the seller as some amount is deducted from the sellers part. 

Blockchain smart contracts can be really very helpful in addressing situations like this. It not only makes the entire process quick but also reduces the need for intermediaries that eventually saves cost for both the buyer and the seller. Furthermore, the ‘if and then’ principle creates a risk-free environment for both the seller and the customer, hence making it a concept to rely upon. This means the transfer of the asset is confirmed once the money reaches the system via the smart contract. 

Also, the concept of smart contract performs as the escrow service as the ownership right is stored and dispersed to each and every participant involved in the transaction at the same time once the process involved is initiated and the transaction gets complete. 

Ethereum

Ethereum is the second-largest cryptocurrency that is being circulated and utilized after Bitcoin, i.e. the first largest. The open-source blockchain is not only decentralized in nature but is also known to support the smart contracts. The cryptocurrency that is generated by Ethereum is called Ether (ETH). The Ethereum miners play a vital role in extracting the cryptocurrencies and adding it on the blockchain. Ethereum is an ideal host for more than 1900 existing cryptocurrencies including 47 of the top 100 cryptocurrencies that exist in the market. 

Working of Smart Contracts and Ethereum

A smart contract can automate many different processes and phases to manage agreement between the customer and the provider. The smart contract facilitates storing of information about cryptocurrency transactions (Ether) both at the seller’s as well as the receiver’s end. The Etherum smart contract is initiated as soon as the user makes a request on the blockchain platform with the requested transaction fees. 

The smart contract includes the business model, predetermined code, that eliminates any kind of delay or interruption in the process that otherwise are probable to occur in case of traditional non-blockchain approach. To have a better understanding of the smart contract and Etherum, refer to the points that are mentioned below. 

1 – Digital Identity: Digital identity containing data, reputation and digital assets are disclosed only to the involved parties that eventually builds trust, ensuring authenticity for better opportunities. It also develops compliance, resiliency, and interoperability while facilitating to know your customer experience.

2 – Record: Uniform commercial code (UCC) includes not only the release process but also the renewal. The goal is to have a record of information and process involved in trading and transaction history for better reference in the future record on user account detail.

3 – Security: Smart contracts simplify capitalization management. The buyer directly contacts the seller, and with the help of a smart contract, the seller gets all details that are filed by the buyer or organization to aid the process and keep the buyer as well as the seller detail in handy. This eventually enhances security and further encourages the incorporation of smart contracts. 

4 – Trade Finance: Trade finance establishes a relationship between the client and any industry. The relationship is based on smart contracts that eventually provides an edge to business, establishes business rule and trade. It then establishes a reference source to establish trade finance and transaction with the help of cryptocurrency.

Read More: How to create online trading exchange platform For bitcoin/cryptocurrency?

5 – Financial Data Recording: It is a similar process that can be resembled the popular online classified portals like Olx, Quikr etc. It means the user searches anything with the help of a smart contract which is a digital contract to a user or platform. The smart contract provides the result according to the user requirements and the recruiter updates records globally with the help of the mortgage holder to give the best result to the user with the help of smart contract for their digital currency transaction.

Related Post: How to Choose and Hire a Blockchain (Ethereum and Hyperledger) Developer?

Role of BR Softech Pvt. Ltd.- Smart contracts development company

As you already know that the world is witnessing a sudden surge in blockchain smart contracts, there are not many software development companies with expertise on the same. However, the expert team at BR Softech Pvt. Ltd. has successfully created and deployed smart contracts based services for various business purposes.

BR Softech Pvt. Ltd. is one of the leading software development companies offering complete front-end and back-end support services for the same. 

Having covered a journey of more than 10 years in the field of software development, the company has undergone various learning phases addressing challenges and complexities that are faced while working on such advanced concepts. 

The company has more than 250 trained IT employees out of a total 450+ staff that caters to every business needs and challenges that are faced during and after the development and deployment of Ethereum blockchain solutions.

If your business needs involve transacting huge amounts and dispersing critical business information to the dedicated participants in a leak-proof environment, then considering smart contracts development services is highly recommended.

Final words

Now when you are well versed with the concept of smart contracts as well as the Ethereum blockchain and the cryptocurrency Ether, the next challenge would be knowing and organizing the development stages in a sequential manner and calculating the budget that is derived from the same. 

Ethereum blockchain development company like BR Softech Pvt. Ltd. is not only helpful in the initial stages of development and deployment, but the well-organized team also excels in providing 24 x 7 assistance in fixing any glitches or bugs that might arise during the functioning of the platform.

Hurry up and approach the expert software development company to secure your business funds transactions along with securely storing and dispersing the critical business information within the limited parties that are involved in the network while avoiding any third party interference via the Ethereum application development services.

Vaibhav Sharma

A technical graduate with a passion for learning. The creative and optimistic mindset landed him in the field of content writing. He has been educating the readers with his words that reflects his experience led wisdom in the IT sector about advancing technologies.

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