What is a SmartContract? In relation to Cryptocurrencies like Ethereum, EOS or NEO

Suppose we want to bet an amount of money X that a football team will win. For this, we should create a neutral account controlled by a smart contract, to which each of the parties should pay X cryptocurrencies. Once the game is over and the team wins, the deal itself will access an official database, check the winner of the football league and automatically send the funds to the winner of the bet.

This would eliminate the middleman that is suppose to be in charge of distributing the payouts among bettors and also charges a fee for doing so, with Blockchain technology a gambler would essentially place trust in a Smartcontract using a protocol like Ethereum to determine the outcome of the match to specifically reward the winner without the need of a centralized system to facilitate this process

What are some other advantages of Smartcontracts?

One that has recently captured our attention was the Beer Vending Machine that was showcased at Consensus 2018 conference that uses Civic Smartcontract functionality as an identity management service to determine & verify the identity of an individual to prove that they are old enough to purchase alcoholic beverages. Civic is basically an identity management service that allows you to protect and authorize the use of your identity in real time. There are many more use cases for Smartcontracts but this is just to give you an idea as to some of the development happening in the Cryptospace, with the idea of integrating the technology to be practical for real-life implications

Or let’s imagine for a moment that we go to a vending machine to buy a soda. It is a contract in which we exchange cash (€ 1) for a good (soda). The machine is responsible for checking the validity of the funds introduced, being not a human, but software which is responsible for verifying the process and is the same who validates or cancels the transaction. Despite this, it is possible that the machine fails, and because the product is stuck, we receive neither the good nor our money.

The main advantage of a Smartcontract is that the use of protocol as being a digital intermediary that gives us is the speed (by trusting that intermediary, the transaction becomes instantaneous), as well as; evidently, security in certain occasions where the level of uncertainty is lower, as demonstrated by Civic identity management service that allows any vending machine directly connected to a network that facilitates the proof of identity & transaction that is encoded & stored data part of a Blockchain

The main reason for the expectation generated by Smartcontracts application in the world of cryptocurrencies is due to the possibility offered by blockchain to allow people, by themselves, to enforce contracts in the real world without the need of a physical intermediary, that is, without the need for a judge or a referee.