Smart Contracts are one of engineering’s newest - and most in-demand - roles. Read on for how Smart Contracts work, skills successful Contracts Engineers should have, and our predictions for the future of the industry.
How do Smart Contracts work, and what are some examples?
Smart Contracts are pieces of code or script that run on the blockchain to provide directions once a particular action has been taken. For example, Smart Contracts may be used to automatically enforce copyrights once infringed, or send payment for a real estate transaction immediately upon contract signature.
Rather than being executed by a centralized organization or person, Smart Contracts are enforced by miners across the blockchain network (the same way cryptocurrency is mined).
Since Smart Contracts don’t require people to execute them, they can:
- Eliminate the need for blind trust: This is an important one. In most instances, contracts are only enforced when one party discovers and reports a violation. For example - let’s say you’re in a car accident and in order to file a claim, you need to work with the other party to send you their insurance, work with their agent, and wait on a claim payment. What if instead - any sort of damage to your car triggered a report being automatically filed through a smart contract? This would eliminate the need to rely on the other party.
- Decrease the costs of two parties setting up a contract or communicating back and forth: Think of past contracts you may have entered into, and the time and money you’ve spent executing them. For example, let’s say you signed an apartment lease and are entitled to your security deposit once moving out. You probably did your own walkthrough and clean out, sent a checklist to apartment management to verify, waited for them to review, then waited on your deposit. With Smart Contracts, time and labor spent could have been dramatically reduced - maybe down to the push of a button.
- Offer more security and protection: Many agreements - both in business and at the consumer level - contain privileged information. For example, let’s say an investment bank uses smart contracts to execute trades; or a patient uses a smart contract to send information from their physician to their insurance company (triggering approval for a surgery). Industries that face privacy challenges - like finance and healthcare - could benefit from the additional security that storing information on a blockchain could bring.
How do Smart Contract Engineering jobs work?
Companies who hire Smart Contract Engineers span a variety of industries, and have applications for real estate, supply chain, health care and finance. A Smart Contracts Engineer may come from a background in Computer Science or another engineering specialty, like front or backend development, with several years of work experience already.
- To design and deploy Smart Contracts: At their core, Smart Contract Engineers are responsible for creating, testing, and implementing Smart Contracts for the companies they work for.
- To implement quality control processes: Smart Contract Engineers need to be able to design and implement quality control processes. This is critical because once a Smart Contract is executed, it’s automated - which may lead to costly mistakes if part of a contract was incorrect.
- To discover ways to help Smart Contracts scale: In some organizations, Smart Contract Engineers may be asked to replicate their results to help other applications of contract projects scale once an existing smart contract is complete.
What are some of the skills to look for in a successful Smart Contracts Engineer?
- Interest in DeFi: Smart Contracts Engineers should have an interest in Decentralized Finance products and an appreciation of the efficiencies and benefits Smart Contracts can bring.
- Understanding of tokenomics and the token economy (aka a thorough understanding of Blockchain): Tokenomics refers to the science behind blockchain technology, which Smart Contracts Engineers will need to understand and use. Having a basic understanding of blockchain vocabulary can be immensely helpful during the job search.
- Rigorous experience in a variety of platforms: Similar to Backend Engineering and other highly technical engineering fields, Smart Contract Engineers may need experience in a variety of platforms, like Python, C++, Java, Ruby on Rails, PHP, Django, Kubernetes, SQL and MySQL databases.
What’s the future of Smart Contracts?
Smart Contracts are one of the newest technologies out there, and there will be no shortage of engineering roles. Two of these responsibilities for engineers may very well likely be:
- To prevent issues stemming from bugs or breaks in code: Bugs happen often in software. But what happens if one occurs during the execution of a smart contract? Analysts say this can have huge implications - for example, if a bug leads to a mistake in a contract, is that mistake now legal?
- To ensure the security of Smart Contracts: The ability to protect Smart Contracts from hacks and leaks will be paramount. Companies and individuals are unlikely to adopt smart contracts if bad actors can gain access and potentially even make changes.