06/12/2022
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Hello Elites!
I Hope Everyone Is Having A Good Time.
Last Week I Was Asked On The Pi Elites Telegram Group To Explain What Smart Contracts And Oracle Is All About.
This Might Be The Last Long Topic Discussion I'll Ever Discuss Because Am Getting More Busy As The Day Goes By.
I'll Only Answer Questions In Short And Brief Texts , Probably Few Paragraphs And That's It .
I Won't Have Enough Time To Keep Everything Really Simple In Long Texts.
But First,Let's Have Our Usual Disclaimer For The Non Readers.
DISCLAIMER:
This Is One Of Our Regular Blockchain Topics On Pi Elites, In That Case,This Topic Discussion May Not Be For Everyone,You May Decide To Read Or Not Read It,It's Your Choice!.
But If You Ever Feel Like Going Extra Mile In Learning And Acquiring Other Things About The Blockchain,You Can Spend Some Time To Read It As I Will Assist In Bringing Those Complicated Topics Very Easy In Simple Explanations With Illustrations For You To Understand It At First Hand.
Alright,Let's Proceed To Talk About Smart Contract First Before We Move Into Discussing About Blockchain Oracle.
Many Has Been Hearing About The Word "Smart Contract" , But Failed To Really Understand The Real Meaning And Function Of Smart Contracts,Well,That's Okay, This May Be The Only Post You Need To Read And Get A Better Understanding About What Smart Contracts Is All About.
Generally,A Smart Contract Is A SELF-EXECUTING Digital AGREEMENT That Enables Two Or More Parties To AUTOMATICALLY Exchange Money, Property, Shares, Or Anything Of Value In A Transparent, Safe And Reliable Method While Avoiding The Need For A THIRD-PARTY Or Without Human Interference.
Take Note Of The Words In CAPITAL LETTERS.
Those Are Key Characters Of A Smart Contract.
It SELF-EXECUTES An AGREEMENT Without The Need Of A THIRD-PARTY Or MIDDLE MAN.
A Smart Contract Is A Coded Computer Software Program Used To Automatically Authenticate An Agreement Between Two Parties When A Certain Condition Is Met.
For Example, In The Banks,At The ATM Machine Point Or POS (Point Of Sales).
When You Insect Your ATM Card And Select The Amount You Wish To Withdraw,The Machine Will Dispense The Cash For You.
You Know,Many People Always Think That There's A Bank Staff At The Backend That Helps In Giving Out The Money When You Insect Your Credit Card In The ATM Machine ,But No,No One Stays There.
It's The Machine That Gives Out The Money, Not A Human.
That's Because,The Machine Is Programmed With A Coded Language In Form Of A Smart Contract And Automatically Pays Out Money When The Condition Of Withdrawal Is Met.
Another Example,Is What They Call A VENDING MACHINE In Supermarkets And Superstores.
A Vending Machine Is An Automated Machine That Provides Item Such As Snacks, Beverages, Food Items And Lottery Tickets To Consumers After Cash Payment, Credit Card Payment Or Other Forms Of Payment Inserted Into The Machine.
The Vending Machine Is Full Of Stuffs Especially Snacks.
You Don't Need To Pay Money To The Store Owner,All You Do Is Just Walk Down To The Machine,Insert Your Card Or Cash,Select What You Want And The Machine Automatically Brings Out The Item For You.
The Most Surprising Of Them All Is,When The Machine Gives You The Balance Of Payment.
I Mean,If Your Selected Item Is Worth $1 But You Inserted A $10 Dollar Bill ,The Machine Will Bring Out A Balance Of $9 For You.
Isn't That Great?!
Well,That's A Mere Typical Use Case Of A Smart Contract In Hardware Machines.
Now The Idea About Smart Contract Was Proposed In The 1990s By Nick Szabo, A Pioneer Of Modern Computer Science, Who Defined Them As A Set Of Virtual Promises With Associated Protocols To Enforce Them
Well,Smart Contract Are Really Being Used In The Field Of Cryptocurrency Blockchain In Order To Facilitate Transactions Between Two Parties.
Because Basically,The Blockchain Is About Carrying Out Financial Transactions And Also Storing Them In A Decentralized Distributed Ledger
Since The Blockchain Itself Is DECENTRALIZED And Doesn't Need Any Third-Party To Interfer ,Then Obviously What Makes Such Agreement Possible Is The Use Of Smart Contract Programs To Help Carry Out Exchange Of Money Between Two Or More People Without Involving A Third Party Or Any Intermediary.
Smart Contracts Are Simply Programs Stored On A Blockchain That Run When Predetermined Conditions Are Met.
Because Smart Contracts Are Executed By Code Rather Than People, They Remove The Possibility Of Human Error And Can Automate Many Tasks That would Traditionally Require Human Interaction
There Are Some Work That May Require A Lot Of Time And Tasks By Human But A Smart Contract Can Help Handle Those Heavy And Complicated Duties.
Smart Contract Can Be Likened To An AI Machine (Artificial Intelligence Machine)
Both Of Them Works Base On Protocols, Instructions, Condition And Codes
A Protocol Is Simply A Set Or Rules Or Process That Must Be Followed In Order To Achieve A Particular Result.
Or Simple Say,A Protocol Is A Set Of Instructions.
But The Difference Between A Smart Contract Program And An AI Is That ,Smart Contracts Are Only Meant For Contract Agreement While AI Performs More Complex Tasks Than Just A Contract Agreement.
For Example,It's 8am In The Morning And You Pick Up Your Phone To Set Alarm By 2pm.
Your Phone Will Automatically Sound The Alarm When It's Exactly 2pm.
This Is The Work Of An AI Not A Smart Contract.
Smart Contract Mostly Deals With Exchange Of Information,Money, Data Or Any Form Of Digital Value, While AI Deals With Multiple And Essential Task.
The Use Of A Smart Contract Is The Cryptocurrency Blockchain Network Is Just To Help Self-Execute Exchange And Transaction Of Digital Values Between Two Or More Parties Without Necessarily Needing An Intermediary Or A Middle Man To Authenticate The Exchange Of Value.
Smart Contract In The Blockchain Can Come In Different Types But It's Basically Used In A Person-To-Person (P2P) Contract , Person-To-Machine (P2M) Contract Or Person-To-Contract (P2C) Agreement.
For Example,
👉In The Case Of P2P Trading,Both Parties Involve Doesn't Need An Intermediary To Change Coins.
One Can Buy Or Sell To Another Person Without Involving The Bank
I Was Asked By A Friend How Long It Takes To Find A Buyer On Binance If He Wants To Sell His Coin?
Yeah,Well,This Has Always Been A Question In The Mind Of Most People Who Aren't Too Familiar With Buying And Selling On The Exchanges.
When I Was A Newbie,I Thought About This Same Question Too,Until I Find Out How It Works.
So,Here Is It...
If You Want To Sell Or Buy Any Coin,You Don't Need To Stress Yourself So Much To Look For Who's Gonna Buy Your Coins Or Who You'll Buy From.
It's Very Easy ,All Thanks To The Smart Contracts In Use.
One Of The Function Of The Smart Contracts In Use Helps To Create An Order Book And Uses An Automated Market Maker(AMM) To Find Possible Buyers And Sellers That Meets Your Own Criteria
For Example, If A Coin Is Sold At $1 But You Wish To Sell It At $1.1 ,With The Help Of The Smart Contract In Use,It Will Help To Bring Out A List Of Sellers That Agrees With Your Term,Then All You Need To Do Is Just To Select Anyone That Satisfies Your Criteria And Trade With Them.
It's A Simple As That!.
The Duration Of Time About How Long The Transaction Can Take Depends On How Fast The Buyer And Seller Is When Making Payment And Releasing Coins.
But If Both Are Sharp It May Take UpTo An Average Of 2-4Minutes.
But Some Tokens Can Take Longer Time Due To Network Confirmation Of Nodes To Validate The Transaction On The Block.
👉 Then ,In P2M Or P2C Is A Kind Used In ATM And Vending Machine, It's An Exchange Between A Person And A Machine ,That's Why It's Called Person-2-Machine Contract.
You Know It Kinda Really Sucks When I See People In Groups Saying ,"I Buy And Sell Pi,DM Me"
This Is Kinda Wrong, Because When A Coin Is Tradable On The General Market,You Don't Really Need To Go All Out Searching For Buyers And Sellers.
Just Go Straight To Any Exchange,There Are Hundreds And Thousands Of Orders(Buyers & Sellers) Willing To Take Your Order.
Smart Contracts Are Verified, Executed, And Enforced By A Computer Program That Runs On A Blockchain Network. When Both Parties Involved In The Smart Contract Agree To It's Terms, The Program Will Automatically Execute. This Eliminates The Need For A Third Party, As The Contract Is Verified And Enforced By The Blockchain Network.
Alright,Now You've Understood The Meaning Of Smart Contracts And How It Works,Am Glad You Did Read It.
Because You May Not Actually Understand What An Oracle Is If You Dont Have An Idea About What A Smart Contract Is.
So Let's Proceed To The Next Following Topic; Blockchain Oracle.
