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Smart contracts & dApps

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More info: https://blockchainhub.net/

Blockchain for Beginners: blockchains are the basis for auto enforceable smart contracts and dApps (decetralized applicatons).

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Smart contracts & dApps

  1. 1. dApps & Smart Contracts BlockchainHub ■ Dr. Shermin Voshmgir ■ November 4, 2015
  2. 2. Smart Contract When a computer can verify or auto-enforce any type of business transaction or legal agreement
  3. 3. Smart contracts Traditional definition # automated performance # automated verification # auto enforceable Ethereum definition # Decentralized Application (dApp) # long lived process on the blockchain
  4. 4. Smart contracts Legal Implications Soft Law Smart Contracts Logic Grounds analog subjective minds bits boolean logic Security contempt imprisonment replication & cryptography Predictability flexible rigid Maturity highly evolved many cases larval few experiences Area juristictional silos (national laws) independence from financial institutions and seamless operations across borders Costs lawsuits expensive extremely low
  5. 5. dApps Where is the data stored? Application data & Records of operation must be # cryptographically stored # in a public # decentralized blockchain # in order to avoid any central points of failure
  6. 6. dApps Decetralized Applications Completely open-source application that operates autonomously, and with no entity controlling the majority of its tokens. The application may adapt its protocol in response to proposed improvements and market feedback but all changes must be decided by consensus of its users.
  7. 7. dApps Cryptographic Tokens Application must use a cryptographic token (bitcoin or a token native to its system) which is necessary for access to the application. Any contribution of value from (miners/farmers) should be rewarded in the application’s tokens. Application must generate tokens according to a standard cryptographic algorithm acting as a proof of the value nodes are contributing to the application (Bitcoin uses the Proof of Work Algorithm)
  8. 8. dApps Requirements Application data & Records of operation must be ● cryptographically stored ● in a public ● decentralized blockchain ● in order to avoid any central points of failure/corruption/censorship
  9. 9. Use Cases of Smart Contract or dApps eGoverment: Tamper-proof public databases: land registries (i.e. Honduras & Greece are interested) Notaries & Registers of the ownership: Documents, luxury goods or works of art can be notarised Fintec: blockchains as record of who owns what instead of having a series of internal ledgers Accounting: Compliance on the fly instead of after the fact IoT: i.e. Slockit (User Access Control) for machine to machine smart contracts
  10. 10. Types of dApps One method to classify dApps is based on whether they have their own blockchain or they use the blockchain of another dApp # Type I: dApps that have their own blockchain. # Type II: dApps that use the blockchain of a type I dApp. Type II dApps are protocols and have tokens that are necessary for their function (i.e. Omni Protocol) # Type III: dApps that use the protocol of a type II dApp. Type III dApps are protocols and have tokens that are necessary for their function (i.e. the SAFE Network uses the Omni Protocol to issue ‘safecoins’ that can be used to acquire distributed file storage)

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