The main purpose of the research is to provide a solution that can resolve the well-known issues in the current smart contract concept and fully change the architecture used in smart contracts and blockchain. For this purpose, the author lists the issues, analyzes them, and provides the solution explaining how it will change the situation and what kind of positive impact it will have not only on the performance of smart contracts and their extensibility but also the impact on pollution and saving of energy.
TopIntroduction
During over 10 years blockchain is known as a technology which is used as distributed database (Bernstein & Lange, 2016) which keeps the track of financial transactions of different types of cryptocurencies (Brown, 2016), such as BTC, ETH, etc. All the payments or financial transactions go via P2P (peer –to- peer) network which allows to decentralized the participants of the network granting them equal, from the network point of view, privileges and consequently such the network architecture is different from a regular client-server architecture where all the clients depend on the server: in the other words, if server is down then no client can connect to it and consequently make any type of transaction (Heuvel, 2014).
Bitcoin officially was the first globally known crypto-currency, although the very first one appeared in the beginning of 90s (Li et al., 2017). The Bitcoin blockchain contains only financial transactions and nothing else. The second well known cryptocurrency in this sphere was ETH which additionally introduced the term “smart contracts” into the blockchain world. A smart contract can be considered as a small program running on a blockchain when it receives a request (Nguyen, 2019). With the help of smart contracts the users could add additional logic not only to the financially related logic but also create very primitive games. At the same time, from the technical prospective, a smart contract is considered as a user who can receive and send transactions. This “user” has a record of different states, also known as variables and these variables stored in a blockchain can be changed and/or read. Reading a blockchain data is free for the users (however is still very slow) however the change of variables (also called as a state change) is expensive (Zhang Rong, 2020). Every state change consumes funds (in Ether world known as gas), it also consumes quite a lot of time necessary for: a) making a transaction (a request for a state change), b) for processing such the transaction c) for building a transaction block which contains a new value for a smart contract. Thus in the Ether world, before the hard fork, the time for building a new block was 21 seconds, after the hard fork it still takes 12.5 seconds which is a lot in the world of IT (Mkrttchian et al., 2019).
An example of a smart contract could be a piece of code (a smart contract) which verifies that both parties of some deal successfully committed their obligations (Nofer et al., 2017), as an example: a buyer sent a transaction and a seller sent a purchased item. Another example of a smart contract from the gaming sphere could be some piece of code (a smart contract) within the gambling sphere: the players make the bets and a smart contract(the code) “runs the roulette” and selects a winner after which the smart contract sends the won funds to the account of the winner. A smart contract could also be used in the other spheres more related to the government (Kongmanee et al., 2019), for example it could be used for different types of elections or collection of different types of opinions, etc. However here we can note that the role of an intermediate judge in the payment process can be done by any of the existing third-party organizations; with regards to the games: the power and ability of the smart contracts are enough only for extremely primitive games; and no government will ever use honest and controlled smart contracts for elections.
Smart contracts are also subjected to attacks, so in 2016 when the Decentralized Autonomous Organization (DAO) smart contract was manipulated to steal around 2 Million ETH (50 Million USD on the time) because of its re-entrancy vulnerability (Tasca Paolo, 2019). In addition to the vulnerability problem, smart contracts face several challenges including privacy, legal, and performance issues.