1. Oracle
1.1. Technology that links smart contracts with the outside world by supplying accurate details for the execution of smart contracts
1.2. The mechanism is based on a multi-sig or a prerequisite to sign a multi-signature transaction for a given account before it is approved.
1.3. Oracle shall refer to the accepted data base and if the necessary conditions are satisfied, oracle shall sign the contract using its private key in order to effect the transaction.
1.4. The oracle uses the trustworthy publicly available data to trigger the insurance policy
2. 4 category
2.1. capital markets and investment banking including corporate finance (Initial Public Offers, private equity), (syndicated loans and leveraged loans) and stock exchange market infrastructure.
2.2. commercial and retail banking including trade finance (supply-chain documentation, invoicing and payments), mortgage lending, loans and crowdfunding for start-ups and SMEs
2.3. insurance, including automated claims processing in motor insurance, crop insurance, etc., fraud prevention in luxury goods and new products such as insurance for the sharing economy, autonomous vehicles, peer-to-peer insurance and cyber insurance
2.4. RegTech or more efficient regulatory and compliance functions
3. challenges
3.1. technical issue
3.1.1. The irrevocability, the failure to incorporate external data sources, the restricted use of distributed ledger technologies today and the need for complex expertise to build and deploy a smart contract system
3.2. legal issues
3.2.1. choosing a court for dispute resolution, choice of law, compliance with regulatory requirements and regulatory access and visibility up to the limited number of lawyers with required coding skills
4. understanding terms
4.1. smart contract
4.1.1. The concept that the code can execute and implement the terms and conditions of the Agreements without or with a minimum of additional input from the Parties
4.2. blockchain
4.2.1. The technology that enabled smart contract
4.2.2. Ledger or chronologically registered transaction archive with a range of benefits relative to the conventional database.
5. 'let's explore' smart contract
5.1. to avoid the confusion with TRADITIONAL DATABASES
5.1.1. 5 types of databases
5.1.1.1. relational databases
5.1.1.1.1. the study focus here since closer to the blockchain concept.
5.1.1.1.2. obj - to divide large information into smaller pieces to process them more efficiently
5.1.1.1.3. pros
5.1.1.1.4. cons
5.1.1.2. key-value stores
5.1.1.3. columnar
5.1.1.4. document
5.1.1.5. graph databases
5.1.2. databases can be distributed over many sites and connected by a computer network or centralized system residing at a single site
5.2. helps to build trust in BLOCKCHAIN within the market
5.2.1. not allow double entrance of the same transaction
5.2.2. create self-enforcing contracts that will modify the blockchain’s data automatically
5.2.3. various model
5.2.3.1. based on permissioned blockchain
5.2.3.1.1. administrator or any other authorized participant(s) verifies the transaction, or consensus protocol might be used
5.2.3.1.2. The relevant consensus protocol of the blockchain shall decide the method of formation and validation of the new block.
5.2.4. information stored
5.2.4.1. there is key encryption infrastructure (PKI)
5.2.4.1.1. method of cryptography which uses two types of keys
5.2.4.1.2. It can also be used to check that the smart-contract exchange was performed by the initiator in control of the private key and that the contents of the message are genuine.
5.2.4.1.3. Participants, who have access to the initiator's public key, will pick up the message and check that the message has been transmitted by the initiator in control of the private key and that the data is genuine and accurate.
5.2.4.2. hash functions
5.2.4.2.1. Any function that can be used to map data of arbitrary size to data of fixed size where the result is a bit string known as hash value, hash code or hash sum.
5.2.4.2.2. Plays the function of glue or mathematically chains one block to another, establishing mathematical confidence.
5.2.4.3. digital time-stamp
5.2.4.3.1. Records the temporary presence of a single blockchain ledger object in a particular instance in a timely manner, specifying that a contract has been initiated or terminated, transfers have been made, etc.