Did you know that as early as 1994 the concept of smart contracts it was invented? That was 15 years before Bitcoin saw the light of day in 2009! And in 2013, Ethereum came out, the first blockchain with smart contract capabilities. Now there are multitudes of blockchains with smart contracts. Developments are moving at lightning speed. With your interest in blockchain, you won’t want to miss a thing. I’ll update you with an overview and comparison of smart contracts. Which smart contract is the smartest?
The first smart contracts
I also didn’t know that smart contracts had been around much longer than Bitcoin. I heard it from Nick Szabo, a computer scientist. He first described smart contracts in 1994. According to him, a smart contract is “a tool that formalizes and secures computer networks by combining protocols with user interfaces.”
In the world of cryptocurrencies and blockchains, a smart contract is an application or program that runs on a blockchain. It is a digital agreement imposed by a computer code. Go to the knowledge base if you want to learn more about what a smart contract is and what it can do.
Although the Bitcoin protocol has supported smart contracts for many years, the creator and co-founder of Ethereum, Vitalik Buterin, popularized them. In 2013, he came up with the first blockchain where smart contracts are paramount. I think Vitalik is a genius and a true pioneer.
Ethereum smart contracts initially had no specific purpose, that came a few years later. Now smart contracts play a major role in these trends:
- Decentralized Finance (DeFi)a general term for a series of new, decentralized
financial applications that work with smart contracts. Read more about DeFi here.
- Non-Fungible Tokens (NFTs)are crypto records that are unique and of which it is stated in the blockchain that you are the owner. Read more about NFTs here.
- Decentralized Autonomous Organizations (DAO), are organizations that function completely autonomously and where company agreements are registered in smart contracts. Read more about DAOs here.
- GameFia combination of gaming and finance, also known as play to win mentioned. These are games that allow you to earn NFTs and cryptocurrencies.
I think there will be more trends soon where the smart contract is the game changer it will be.
After Ethereum, several first generation blockchains with smart contract capabilities were rapidly developed.
NEO, also known as the Chinese Ethereum, was founded in 2017. The main goal of NEO was to use smart contracts to effectively distribute digital assets. I see NEO as the predecessor of DeFi.
EOS, which was released in 2018, is an operating system for decentralized applications (DApps). The variety of DApps on the EOS network is staggering. EOS is similar to Ethereum, but the founders of EOS were eager to compete with Ethereum’s weaknesses; slow and expensive transactions.
Early blockchains like Bitcoin and Ethereum had very centralized decision-making around design and development. This not only led to a lack of diversity and flexibility, but also fork block chain. That is why Tezos (XTZ) from 2018 decided to develop a network in which the decision-making is in the hands of the users. The future of the network is democratically determined by the Tezos DAO.
Personally, I think the DAO is a great concept. In the long run, it will completely change organizations. Thanks to smart contracts!
With the development of blockchains and smart contracts, more and more specialization is seen, such as DeFi, NFT, DAO, and GameFi. After the first generation came second and third generation blockchains such as Cardano (ADA), Solana (SOL), and Polkadot (DOT). These blockchains are much more scalable, faster, and cheaper than their predecessors.
But first-generation blockchains, such as Ripple (XRP) from 2013 and Iota (MIOTA) from 2017, have recently been expanded with smart contract options. I like to see older blockchain projects continue to develop.
Differences and similarities
Therefore, you will see more and more different types of smart contracts emerge. But basically they have the same properties as Ethereum smart contracts. One big difference is what type of blockchain a smart contract runs on. Proof of Stake (PoS) Blockchains are much faster and cheaper than Proof of Work (PoW) block chain.
Where smart contracts certainly differ is in the programming language. Each smart contract blockchain has its own programming language. Ethereum has Solidity and Cardano Plutus. Solana smart contracts can be written in any programming language that automatically translates into Solana code. How easy is that?!
Is Solana the smartest? There is a lot of competition and developments are moving very fast. I keep an eye on Cartesi (CST) and Fusion (FSN). Cartesi, like Fusion, is a protocol for writing a smart contract in any programming language for any blockchain. Programming languages are also becoming more and more compatible with the Ethereum Virtual Machine (EVM) so that they can communicate with the Ethereum blockchain. I think it’s a good development.
Smart contracts are indispensable and will have more and more applications. In the beginning, programming only worked if you knew the specific programming language. New developments make it possible for everyone to soon make smart contracts. Imagine what that means for blockchain adoption!