[ad_1]
The Commodity Futures Trading Commission (CFTC) has published a 32-page primer that breaks down the uses, risks and challenges of blockchain-based smart contracts.
The report, a detailed educational resource, accelerates the learning curve for regulators, policy makers and US investors.
As defined by the CFTC, smart contracts are a set of coded computer functions that can perform self-executable actions based on satisfied or unmet criteria. An intelligent contract does not have to be a legally binding contract.
There are three main attributes of an intelligent contract.
- It can authenticate counterpart identities, ownership of assets and claims of right
- It can access or reference external information or data to trigger actions
- It can automate the execution processes
The report continues by explaining how blockchain and distributed ledgers are platforms on which intelligent contracts can be archived and distributed.
The authors refer to further points of view on the nature of smart contracts, citing the co-founder of Ethereum Vitalik Buterin.
"An intelligent contract is a mechanism that involves digital goods and two or more parts, in which some or all parts enter resources and activities are automatically redistributed between those parties according to a formula based on certain data that are not known at the time the contract it started. "
The mission of the CFTC is "to promote open, transparent, competitive and financially sound markets". It lists several potential advantages of smart contracts.
- Standardization
- Safety
- Economy and speed
- Certainty
- Business innovation
- Regulatory innovation
Blockchain technology, particularly in tandem with smart contracts, is destined to reshape trade, logistics and business transactions by eliminating a variety of intermediaries. The attractiveness of the new blockchain is largely driven by solutions that eliminate intervention, uprooting cheaters, creamers and scammers who try to rig systems, transactions and agreements.
Join us on Telegram
Potential risks may vary from technical to operational to cybersecurity to fraud and manipulation.
Smart contracts can use cryptocurrencies to transfer digital assets and programmable money.
The CFTC president J. Christopher Giancarlo has been generally in favor of blockchain technology and cryptocurrencies, adopting a "do no harm" approach.
You can check the full report here.
Disclaimer: the opinions expressed in The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and operations are at your own risk and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of any cryptocurrency or digital assets, nor The Daily Hodl is an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Check out the latest news
