Why Smart Contracts and Decentralized Blockchain?
What is Ethereum?
Recently, the world has been captivated by the wonders, and possibilities of the new, upcoming “crypto-reaper” technology known as Ethereum. But what is Ethereum exactly?
What kind of applications does it offer to programmers and entrepreneurs alike?
And best of all, what is the fundamental value behind the project that makes it so exciting to develop businesses and programs?
A “smart contract” is essentially a program that runs on the decentralized Ethereum blockchain. A smart contract, also known as an “asset,” is a series of information (the operations of a particular smart contract) and code (the operations of a particular smart contract) that lives at a certain address on the decentralized e Ethereum blockchain. Once this particular smart contract is executed, it then begins the transfer of funds from the owner of that smart contract to another smart contract and so forth.
Unlike traditional asset and equity transactions, smart contracts are strictly digital and do not require any paper or ink. The execution of these transactions happens off of the main ledger of the decentralized e-blockchain, known as the “blockchain.” It is this digital ledger that is the true heartbeat of the entire system. No other digital system can truly live up to the expectations placed upon the ledger, which is essentially the life and blood of the e-blockchain. All other systems are merely applications that facilitate the regular operations of the ledger on a day-to-day basis.
The core value behind the development of the Ethereum Project is the implementation of a new technology that will enable developers and entrepreneurs to run their businesses without any need for a third-party intermediary. This new technology comes in the form of a new open-source software development environment or the OPAM. This project was born out of research undertaken by the Ethereum Alliance, a non-profit organization made up of a consortium of venture capital firms, developers, businesses, and academic institutions.
One of the primary goals of the Ethereum Project was to determine if a decentralized system could be achieved by a small group of participants who contribute largely by virtue of their expertise, while still retaining the ability to enforce all of their intellectual property rights. The protocol developed within the Ethereum Enterprise Community [ECC] was supposed to do just that. The result of the research was the birth of what is currently known as the Ethereum Virtual Machine [VMM]. The underlying idea behind this technological innovation is that one way to ensure that smart contracts are enforced correctly and all applicable regulations are logged into the blockchain is for each transaction to include a reference to the originating smart contract. Any damages resulting from an attack against this system are then distributed to all of the participants in the network.
Since this technology is still in the early stages of development, a lot of discussion and analysis is currently underway. The main reason why this technology was needed is due to the recent financial problems that both Cyprus and Greece are facing. In the case of the former, the use of bailout funds was necessary in order to keep the financial services sector alive. In the case of Greece, the effects of its financial problems are so extensive that the government has had to ask for financial help from international financial institutions. As a result, the problems that they are facing will have an effect on every aspect of society, from the banking system to the electronic medical record. This is the main reason why it is very important for the governing law of the Ethereum Project to make sure that smart contracts are properly enforced.
One major concern that many people have is whether or not they can enforce these smart contracts in state law. There are two main problems with this concern. Firstly, there is a concern that the enforcement of these contracts may have a negative impact on the legitimacy of state law. Historically, contract law was always considered to be federal law, and there is no guarantee that the same contracts will be enforced across state lines in the future. Secondly, even if the laws are different in each state that is covered, a lot of the power in enforcing the agreements rests in the hands of the state attorneys general.
For these reasons, there is actually no reason why smart contracts must be enforced in state laws. However, there is also no reason why anyone should wish to enforce these contracts in state laws either. One would simply have to adopt a policy of not spending money in a specific country without a valid reason. Regardless, it is important to make sure that the developers are fully conscious of the consequences of their actions and that they do not break any laws during the development process.
