Nick Szabo, a computer scientist and a cryptographer created the term “smart contracts” with the aim of using distributed ledger technology to store contracts. This idea came to life with the emergence of the Ethereum blockchain several years ago. Smart contracts in the real world can be described as the terms and conditions agreed upon between buyers and sellers on a ledger, but on the blockchain smart contracts could be defined as;
A computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of the need for trusted intermediates, arbitration costs, and fraud losses, as well as the reduction of malicious and accidental exceptions. Wikipedia
On the Internet Computer protocol smart contracts are addressed as Canisters. These are computing units that combine code and state. Canisters expose endpoints that can be accessed by other canisters as well as parties outside ICP, such as browsers or mobile applications. I.e. they are autonomous units of computation that run directly on the internet. Unlike traditional smart contracts, which are confined to specific blockchain platforms and often limited in functionality, ICP canisters are designed to be platform-agnostic, enabling developers to deploy and interact with them seamlessly across the web.
One of the most distinctive features of ICP canisters is their scalability. Traditional smart contracts are often constrained by the processing power and storage capacity of individual blockchain networks, leading to performance bottlenecks and scalability challenges. The Internet Computer is powered by Chain Key Cryptography which allows the smart contract to be verified on ‘subnets’ thereby giving it clear scalability advantages over smart contracts running on traditional blockchains, where the entire blockchain from Genesis is needed to verify the current state of affairs. This enables canisters to handle complex computations and easily serve large-scale applications, making them ideal for building next-generation DApps.
Another key feature of ICP canisters is their seamless integration with existing web technologies. While smart contracts typically require developers to learn new programming languages and frameworks specific to a particular blockchain platform, ICP canisters support familiar web development languages such as JavaScript and WebAssembly, making it easy for developers to leverage their existing skills and tools.
Furthermore, ICP canisters offer enhanced security and privacy features compared to traditional smart contracts. This is achieved by leveraging advanced cryptography and secure execution environments, canisters ensure that sensitive data and transactions remain protected from unauthorised access or tampering. ICP canisters are distinguished by their openness, interoperability, and decentralisation. Unlike closed ecosystems where smart contracts are restricted within individual blockchain networks, canisters operate in a truly decentralised manner, running on a global network of nodes and interacting with each other seamlessly across the internet.
ICP canisters are already playing a pivotal role in shaping the future of blockchain computing. With their unique features and capabilities, they offer a compelling alternative to traditional smart contracts, providing developers with the tools they need to build scalable, secure, and interoperable decentralised applications that empower users and unlock new possibilities across the web.