Blockchain System And Smart Contracts
Blockchain may be expressed as a database which is providing tracking encrypted transactions, that data do not have center and is kept as anonymous. Blockchain is simultaneously stored on servers of its users and unless it concurrently does to %51 of all servers holding of users, a cyber-attack to any blockchain system cannot exceed the security of system. Therefore, Blockchain is deemed as a highly reliable database system.
Due to Ethereum is developed as a tradable of any records on Blockchain System, Blockchain is no longer a crypto currency and is constituted technologic infrastructure of Smart Contract System. Ethereum is the Crypto Operating System. The Ethereum platform, based on Bitcoin’s blockchain idea, provides to developed the Decentralized Software Protocols on this operating system as using its own special software language. The Protocols around decentralized forecast markets and decentralized calculations, file storage have the potential to significantly increase the efficiency of the calculating industry and through this programming language, particularly in financial and stock exchange transactions It is possible to engage in this contracts and negotiate it in many areas.
Thanks to this infrastructure, in case of defining of a condition as cryptographic and occurring of the condition, the result which is realized are defined algorithmically. In this way, a contract in which conditions and results which are arranged is drown up. The validity of the contracts shall not be subject to the requirement as to form unless otherwise provided by law. For this reason, it is necessary to agree that mutual declaration of acceptance can be made through blockchain systems or as well as on paper.
This technology eliminates third parties in business transactions and uses the Internet as an intermediary. On accelerating any transactions during its occurring, Internet prevents this process from error and manipulate. The parties in the entire network automatically keep books of accounting in this system and provide the highest protection against any manipulation on the books. However, a smart contract takes an encoding and combines it with the potential of the block chain to interact with multiple financial systems, asset records, and more.
With the use of block chain technology, which is still in its infancy, smart contracts are currently used for the execution of agreements on currently closed systems. When entire records and financial systems are interconnected by block-chain technology; the implementation of smart contracts will ensure that processes which is not need subjective human intervention are automated.
It may arise in the competent problems in contracts due to these blocks may be created in different parts of the world and this multi-system is established with making chain of many blocks interacting with each other. Each process can potentially enter the jurisdiction of the location of each node in the network. When a counterfeit or erroneous operation is made, it may be difficult to pinpoint the position in the block chain. For this reason, it is mandatory included an exclusive a law system and jurisdiction to contracts.
Blockchain has many risks in terms of security and privacy as a result of the technology and way of operation in consequence of its functioning cannot be controlled. Thus, the correct identification of risks, the allocation and association of responsibilities with respect to a blockchain service that poses a risk should be carefully regulated among all relevant participants, in particular the parties to the contract. In addition, the unique transparency of blockchain transactions is not in line with needs of privacy of the banking sector. In order to prevent this situation from impeding the use of relevant systems in the banking industry, technology-based solutions must be found to design privacy-protected block chains. It is advisable to towards a technology that will balance between confidentiality and transparency of IT specialist who want to provide solutions to the financial services industry through in particular blockchain systems.
To summarize briefly; In smart contracts, data is in code form. The realization of payments and other actions is achieved by technology and rule-based operations. The realization of and other actions is achieved by technology and rule-based operations. Unless a result is bound to an unfulfilled condition, once initialized, the results in which an smart contract is encoded cannot be stopped. Corporations and financial institutions may provide inclusively using to these systems to allocate ticket and verify of passenger identification of energy consumption, control the property ownership for trading of merchandise, export and transferring stock. Blockchain has the potential to be an integral part of many businesses operation, but there are a number of risk-based issues that need to be taken into account as in most new technology service offerings.