How Smart contracts work
A traditional ledger in any organization would be used to record transactions, trace assets, investments, and inventory. This would mean that several ledgers would need to be maintained throughout the organization and this would cause duplication of effort. Because theses ledgers would be stored on a central system it would also be susceptible to cyber-attacks, fraud and network downtime
Smart contracts that utilize Blockchain technology and allows all the participants to share and interact with each other using a single ledger, agreement or transaction. Smart contracts are shared between members that execute the code independently and then checked by each member. The blockchain ledger ensures that all the data in the program are identical when the program is executed. When the participants execute program consensus should be reached meaning all members come to the same conclusion with the results recorded on the distributed ledger. Smart contracts operate by following a simple rule IFTTT “if this then that statements”, if this happens then ation the next sequence of events programmed into the Smart contract on the Blockchain. The design of the the blockchain ensures reliability and security ensuring that the transactions that happen cannot be changed, modified or edited.