Theory and implementation of a secure deal in Membrana using smart contract technology

Fasten your seatbelts, guys: We’re about to take off real good. This time, we’ll have lots of explanations as usual, but we’ll also talk about a practical example to show you how Membrana in particular uses smart-card technology.
First of all, we’ll be taking a look at the smart contract description and representing one of its main aspects—smart contract security. Don’t worry—we’ll make sure to keep things both simple yet informative so that everyone can follow along and get the hang of it.
Later on, we’ll just be talking about this technology in general and how the Membrana platform implements it, and lastly, we’ll talk about the Ethereum blockchain.
Stick around to find out more about this new and interesting world of smart contracts!

Introduction to smart contract description

Sure, you can go to Wikipedia and read something like “it’s a computer protocol intended to blah, blah, blah...” but that’s neither simple nor interesting. We want to make sure that, once you’re done reading this blog, you’re able to explain to a random passerby on the street what smart contracts (smart contracts) are.
We’ll start from around the corner and slowly get to the core.
That middleman is what we’re all getting sick of—whether a bank, a local exchange, or something else. There’s always someone—a person or company—in the middle who isn’t directly involved in an activity (a transaction, for example) who we still have to operate via.
These smart contracts help us get rid of that middleman!

What are smart contracts used for

Basically, these contracts can be used for transactions (selling, buying, exchanging) of anything that has a value—assets, shares, money, and even property. The best thing about these transactions is that they take place in a conflict-free and transparent way—and that’s what we’re all looking for, right?
Let’s take a moment to remind ourselves of how painful our everyday activities can be—for example, picking up a driver’s license. In addition to passing the tests, you’re supposed to either go to a notary or your lawyer and pay them, and then there’s the most annoying part—waiting for the document.
These smart contracts allow you to simply pay, for example with a Bitcoin (almost instantaneously), and the driver’s license is yours.

Final smart contract description

In terms of what we’ve spoken about earlier, we’d just like to point out that there are strict rules when it comes to these smart contracts, and the rules are applied and executed immediately. That’s the tiny detail that makes these things so secure, preventing disasters (like fraud or misconduct).
Finally, here’s what a smart contract actually is—computer code used to execute all kinds of transactions of anything that has a value. The very moment a transaction reaches the ledger, this code is executed, and if everything is valid and confirmed, the transaction closes successfully.
Let’s not forget that this code acts like a computer program and runs on the blockchain, which means that it executes exactly as it was programmed to without any deviation.
We believe that, based on everything we just explained, you’re now aware of the level of security smart contracts offer.

Introduction to the smart contract technology

Now that we’ve covered what these smart contracts are, let’s talk more about what this technology can do and why was it developed in the first place.
At first, blockchain technology was a PoW (proof-of-work) hashcash system used by Bitcoin, and it basically represented a security measure.
Whatever happens on the blockchain (any transaction) has to be approved by the participants (miners), and therefore, fraud and misconduct can’t occur. Unfortunately, this system encountered certain issues, so people decided to solve them by creating a new technology—the smart contract. Guess which platform uses this technology? That’s right, Ethereum.
We personally find this technology interesting, and we’d like to show you how the Membrana platform has implemented it.

Membrana’s implementation of smart contract technology

These smart contracts allow you to input data and rules to be applied and enforced no matter what. Information based on Smart contract code is entirely transparent and open for public.
Membrana found this technology useful in terms of providing secure deals to the users of its platform. Thanks to these smart contracts, we implemented functionality that takes care of executing and concluding transactions of trust management between traders and investors.
If you’d like to take a look at the code that implements such a thing, take a look at our whitepaper.

Ethereum blockchain

We’ve mentioned many different things in this blog, but they’re all part of the vast world of the blockchain. To conclude, we’ll mention a couple of things about the cryptocurrency and platform that pioneered smart contract technology—the Ethereum blockchain.
The Ethereum blockchain represents a decentralized platform that uses the technology we’ve already talked about. These smart contracts run on a specific blockchain that actually represents infrastructure available to everyone.
Thanks to these smart contracts, developers and even regular users can develop great and meaningful things (platforms and decentralized smart contracts) for broad purposes, and the Ethereum platform greatly supports this development.

Comments