Chain Facts

What are blockchains?

Blockchains are a new kind of database technology pioneered by the digital currency Bitcoin; and now adapted for handling various tasks for the financial, legal and software industries. Blockchains differentiate themselves from conventional databases in the following ways:

  • Lack of a single owner: One interfaces with a multitude of databases everyday. One of them store tweets, others store personal information and so on. Each of these generally have a single owner who can manipulate the database as per her will. Blockchains, on the other hand, distribute ownership over multiple people and companies, thereby ensuring that database rules cannot be arbitrarily altered.
  • Cryptographic integrity and immutability: Unlike your excel file that does not save the history of how the current file came to be, blockchains record events such that no one can manipulate or raise questions about occurrences in the past. It is the perfect medium for recording financial transactions and prevent disputes.
  • Have smart contract functionality: Blockchains enable users to make impartial, immutable, cheap, self-executing legal contracts with each other. Refer to the other links for understanding smart contracts.

What is a smart contract?

 Smart contracts are programs that can own, hold, execute logic upon and transfer financial assets such as currencies, stocks and bonds. Conventional financial systems have a fundamental assumption: Money is always transferred between individual people and companies. For instance in the SEPA system, each IBAN number is always owned by a legal person or an organisation. This assumption has served us well for centuries, but has been recently broken with the deployment of smart contract technology in the Ethereum platform


Ethereum is a software platform enabling a third major party in the movement of money: Executions of Programs. People can send money to executions of programs. When certain programmer-defined conditions are met; executions of programs can transfer money to an organisation, person or another program. Programs capable of receiving, holding, executing logic upon and transferring financial assets are called smart contracts.

Why are smart contracts useful?

Smart contracts are a vehicle for a radical disruption of current financial, legal and internet software systems. Many conventional financial and legal instruments such as futures, options, derivatives, letters of credit, contracts for purchase, business rules of a company etc. are expressible as smart contracts. The cost of creating and deploying smart contracts can be much lower than the cost of maintaining conventional paper based legal contracts. These properties enable developers to build smart contract based e-commerce systems, reputation systems, gambling platforms, smart contract enabled organisations, currencies, banks etc.


The potential use-cases of smart contracts are immensely large. We have only scratched the surface of this amazing technology. A wide vista of business and career opportunities await people who can use this new medium to solve global business problems.

What can I build with smart contracts?

Smart contracts can be used to build e-commerce systems, reputation systems, gambling platforms, smart contract enabled organisations, currencies, central banks, physical commodity depository businesses, prediction markets etc. Creative entrepreneurs are building next-generation businesses such as:
  • Etherex – A system for exchanging assets without any middleman such as a broker, stock exchange, central securities depository or a bank.
  • MakerDAO – A central bank that creates its own price stable cryptocurrency called Dai
  • GroupGnosis – A platform that enables a big group of humans to forecast the future with stunning accuracy
  • Colony – A platform enabling people to build complete organisations with business rules enforced by smart contracts
Applications of this technology is limited only by your imagination. What shall you build?

Where can I learn more about smart contracts

Here are some external links explaining smart contracts in depth:

History & Future

Cypherpunks, Bitcoin, Ethereum, Enterprise-Grade Blockchains, Web Of Smart Contracts

Build Your Dapp

Decentralized Application Development, IDEs, Workflows, Funds Security, Smart Contract Compilation, Testing

Low Level Components

Hash Algorithms, Distributed Consensus, Transaction Models Of Bitcoin And Ethereum, Merkle Trees etc.

Advanced Smart Contracts

Provably Honest Oracles, Prediction Markets, Reputation Systems, Creating Test-Nets, Node Configurations

Basic Smart Contracts

Functionality, Gas Model, Design Considerations, Quirks, Applications, Code Your Own Applications

Value Proposition

Potential In Enterprise Environment, Deployment Challenges, Strengths And Weaknesses, Low-Hanging Fruit Applications

Enterprise Courses

Blockchain Labs has many events for you. Explore our events and discover what we have to offer.

Blockchain Basics for Enterprises

Blockchain Basics for Enterprises

Are you looking for guidance with regards to understanding the essential and non-essential parts? If so, this one-day course is perfect for you to get a broad understanding.


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