Developing Smart Contracts for Financial Payments as Innovation

Literature Review

Smart contracts widely found in the literature along with the application area of blockchain technology. Lian Yu et al., (2017) stated that work processes are doing consist of operational processes and that these processes are related to contracts and regulations. They have evaluated the use of smart contracts to model, organize and implement these processes and to maintain a provable reliable data history. They stated that smart contracts are executable code that runs on the blockchain. The definition of smart contracts defined as “a collection of computer protocols that verify, enforce, or enforce contract negotiation or performance, by automatically implementing the contractor's conditions, reducing the transaction costs associated with the contract, and hoping to provide better assurance than traditional paper-based contract management.”

This study also emphasized that smart contracts operate on a blockchain supporting a digital currency and that they are used to build smart contracts, as an open source project which is called Ethereum. They pointed out that a smart contractor is mostly an automated device in the Ethereum blockchain that has an address and a balance and can send and receive transactions.

In the smart contracts at the base of the blockchain, there are a number of distributed authentication nodes that communicate and synchronize with each other over a high-speed peer-to-peer (P2P) network. There is a voting mechanism to keep each node consistent. In order to store the transaction states and save the results, the account block-chains are separated, and in case of a fault, there is a recovery mechanism to recover the transactions.