Smart Contracts on the Blockchain: A Personal and Critical Perspective

Hello, everyone! Today I'm going to talk about these so-called "smart contracts" that everyone has been commenting on. I confess that at first I thought it was just another buzzword in the crypto industry, but after diving into this world, I realized that it is much more interesting - and problematic - than it seems.

What the heck are these smart contracts?

Smart contracts are basically codes that run automatically on the blockchain when certain conditions are met. No intermediaries, no bureaucracy! It's like that friend who always pays their debts on time - you don't have to keep reminding them.

They have some characteristics that fascinate me:

• They execute on their own when conditions are met ( like that vending machine that gives you the soda after you put in the money )
• They are transparent (everyone can see what is happening)
• They do not depend on any "boss" controlling everything
• Once created, no one can tamper with them (not even the creator!)

Where is this technology being used?

DeFi ( or as I like to call it: the Financial Wild West )

The entire decentralized finance market uses smart contracts. Platforms like Compound and Uniswap allow loans and exchanges without needing banks. However, I have seen many people losing money because they don't fully understand how it works!

Supply chain

Here I see enormous potential. Imagine tracking a product from the manufacturer to you without the possibility of tampering? It sounds great in theory, but in practice, we still have integration issues with the real world.

NFTs and digital art

I'm not going to lie, I think many NFT collections are pure speculation. But the technology behind them, based on smart contracts, is revolutionary for proving digital authenticity.

Insurance

This application excites me a lot! I'm tired of arguing with insurance companies to receive compensation. With smart contracts, if event X happens, you automatically receive Y. No discussion!

How do they work in practice?

1. Someone writes the code of the smart contract (usually in Solidity)
2. This code is deployed on the blockchain network
3. The contract sits there waiting for something to happen to be triggered.
4. When the conditions are met, it automatically executes.
5. Everything is recorded on the blockchain forever

The challenges that no one talks about

Most "experts" only talk about the wonders, but let's be honest:

1. Security is a nightmare! A single coding error and millions can disappear. We've seen this happen many times.

2. The fees can be outrageous. Especially on Ethereum, there are days when making a simple transaction costs more than an international bank transfer.

3. It's too complicated for the average user. Those who are not technical get lost in terms like "gas", "nonce", "confirmations"...

Honestly? I think we are still in the infancy of smart contracts. The potential is immense, but we need to solve many problems before my grandmother can use them.

While traditional platforms continue to charge outrageous fees and create barriers, smart contracts offer an alternative. They are not perfect, far from it, but they represent an important step towards a fairer and more accessible financial system.

And you, have you ever used a smart contract without realizing it? Share your experience!