The Problem with Smart Contracts
Smart contracts 101
A smart contract is a self-executing set of instructions built on top of the blockchain that automatically enforce and execute the terms of an agreement between parties. Smart contracts are an increasingly popular tool in a variety of applications and industries, including supply chain management, real estate property ownership transfer, insurance claims processing, financial derivatives trading, and more. Once a smart contract is deployed, it can't be altered or modified, ensuring that the terms of the agreement are enforced as written.
Use cases for smart contracts
Supply chain management
Smart contracts can be used to automate the tracking and validation of goods as they move through the supply chain. For example, a company could use a smart contract to verify that a shipment of goods has been received at a specific location, or to automatically release payment to a supplier once goods have been received and inspected.
Smart contracts can be used to automate the transfer property ownership once the seller has made the agreed upon payment.
Smart contracts can be used to automate the processing of insurance claims. A smart contract could be used to automatically verify the validity of a claim, calculate the payout amount, and release the funds to the policyholder, for example.
Smart contracts can be used to automate the trading of financial derivatives such as options and futures. For example, a smart contract could be used to automatically execute a trade when certain conditions, such as the price of an underlying asset reaching a certain level, are met.
Limitations of smart contracts
But there’s one major problem with smart contracts: they are extremely limited in the on-chain data they can access, and therefore the types of questions they can ask and the logic that can be programmed into them. This means that even basic queries about information on-chain, such as "show me this wallet’s purchase history" cannot be executed by a smart contract, let alone more complex analytic queries that generate insights.
To connect these insights to a smart contract, you have to run the queries in an off-chain data warehouse. But today's data warehouses are all centralized and tamperable, and a smart contract is not truly trustless if it requires you to trust the data used to compose it.
Decentralized data warehouse
This all changes with a decentralized data warehouse, and that's where Space and Time comes in. Space and Time allows you to run any query workload against both on-chain and off-chain data and connect the results back to smart contracts with cryptographic guarantees. You can even join on-chain and off-chain data in a single query.
Proof of SQL™ is a novel cryptographic protocol that proves that queries run in Space and Time are accurate and that the underlying data hasn't been tampered with. This means that you don't have to trust that your smart contract is getting the right data—it's cryptographically guaranteed.
With Space and Time, smart contracts become much more powerful. They go from being too limited to execute basic business logic to being able to run an entire blockchain-based social media. Space and Time is making smart contracts smarter, and it can solve your use case too.