On August 2nd, 2021, Cardano enabled smart contracts in their public test network. The concept of “Smart Contracts” goes back to the 1990s. It simply means that a computer can execute an action automatically, in response to a predefined event. When smart contracts are combined with blockchain technology, their potential is tremendous.
The first hurdle to understanding smart contracts is imagining the real-life scenarios where they might be useful. Here are some examples to spark your imagination:
–> When someone buys a song or digital artwork, royalties are paid automatically to the artist or creator. These royalties could apply not only to the original sale, but every time the digital creation changes hands!
–> When my Lyft driver arrives at my destination, their payment is automatically executed.
Beyond these everyday examples, Smart Contracts are the key ingredient of a big future-thinking concept: Decentralized Autonomous Organization (DAO). In a DAO, the rules are set in code, and the money relating to a given function is “locked” in a smart contract.
In a “smart contract” world, you don’t need escrows. You don’t need legacy payroll providers, or oversight committees. You don’t need any middle-man whose only function is to provide “trust” in social contracts. Instead, anyone can inspect and confirm that a contract does what it says it will do.
Smart contracts have been a long time coming to Cardano. Their arrival was delayed several times - for good reasons. Smart contracts on other blockchain systems have had security holes and issues. These have resulted not only in frustration, but in the theft of hundreds of millions of US dollars. Cardano opted to take as much time as needed to create a smart contract platform that lives up to its promises of security, clarity, and ease of use. Smart Contracts that are really smart!
The release of smart contracts on the test network means that the “real” release is coming very soon. The Cardano community is lighting up with the news! Now, the Cardano team is working with exchanges, wallet providers, and other ecosystem vendors to update their software to support smart contracts. If you receive emails from your favorite Cardano exchange about downtime and maintenance, this is probably what’s going on. The plan is to officially release smart contracts on the main network on September 12, 2021.
After September 12, you will start to see apps that you can use on your mobile devices that use the Cardano blockchain. Up until now, Cardano has mostly been used to buy and trade ADA, Cardano’s currency.
Here at Lido Nation we plan to use smart contracts to allow you to directly participate in the content and direction of LidoNation.com. For example, we may allow community members to “sign a contract” to do some work on the site, or contribute content, in exchange for ADA from the pool rewards. These ideas are in their infancy, but smart contracts will make them possible!
As pioneers of this new technology, we expect it to be a lot of learning, along with some trials and errors - but that’s a problem for October. For now, it’s a cool and sunny September morning, and we are joining the the extended Cardano community in gleeful anticipation of the coming release, and the promise it holds for our future.