International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056 Volume: 06 Issue: 06 | June 2019 www.irjet.net p-ISSN: 2395-0072 © 2019, IRJET | Impact Factor value: 7.211 | ISO 9001:2008 Certified Journal | Page 3880 Smart Contracts using Blockchain Rajat Rawat 1 , Rohan Chougule 2 , Shivam Singh 3 , Shiwam Dixit 4 , GUIDED BY – Prof. Anup Kadam 5 1,2,3,4,5 Computer Engineering Department, Army institute of Technology, Pune ---------------------------------------------------------------------------***--------------------------------------------------------------------------- Abstract—In recent years, the rapid development of cryptocur- rencies and their underlying blockchain technology has revived Szabo’s original idea of smart contracts, i.e., computer protocols that are designed to automatically facilitate, verify, and enforce the negotiation and implementation of digital contracts without central authorities. Smart contracts can find a wide spectrum of potential application scenarios in the digital economy and intelligent industries, including financial services, management, healthcare, and Internet of Things, among others, and also have been integrated into the mainstream blockchain-based develop-ment platforms, such as Ethereum and Hyperledger. However, smart contracts are still far from mature, and major technical challenges such as security and privacy issues are still awaiting further research efforts. For instance, the most notorious case might be “The DAO Attack” in June 2016, which led to more than $50 million Ether transferred into an adversary’s account. In this paper, we strive to present a systematic and compre-hensive overview of blockchain-enabled smart contracts, aiming at stimulating further research toward this emerging research area. We first introduced the operating mechanism and main- stream platforms of blockchain-enabled smart contracts, and proposed a research framework for smart contracts based on a novel six-layer architecture. Second, both the technical and legal challenges, as well as the recent research progresses, are listed. Third, we presented several typical application scenarios. Toward the end, we discussed the future development trends of smart contracts. This paper is aimed at providing helpful guidance and reference for future research efforts. Index Terms—Blockchain, parallel blockchain, six-layer archi- tecture, smart contracts. INTRODUCTION THE TERM “smart contract” was first coined in mid- 1990s by computer scientist and cryptographer Szabo, who defined a smart contract as “a set of promises, specified in digital form, including protocols within which the parties perform on thes e promises [1].” In his famous example, Szabo analogized smart contracts to vending machines: machines take in coins, and via a simple mechanism (e.g., finite automata), dispense change and product according to the displayed price. Smart contracts go beyond the vending machine by proposing to embed contracts in all sorts of properties by digital means [2]. Szabo also expected that through clear logic, verification and enforcement of cryptographic protocols, smart contracts could be far more functional than their inanimate paper-based ancestors. However, the idea of smart contracts did not see the light till the emergence of blockchain technology, in which the public and append-only distributed ledger technology (DLT) and the consensus mechanism make it possible to implement smart contract in its true sense. Generally speaking, smart contracts can be defined as the computer protocols that digitally facilitate, verify, and enforce the contracts made between two or more parties on blockchain. As smart contracts are typically deployed on and secured by blockchain, they have some unique characteristics. First, the program code of a smart contract will be recorded and verified on blockchain, thus making the contract tamper-resistant. Second, the execution of a smart contract is enforced among anonymous, trustless individual nodes without centralized con- trol, and coordination of third-party authorities. Third, a smart contract, like an intelligent agent, might have its own cryp- tocurrencies or other digital assets, and transfer them when predefined conditions are triggered [3]. It is worth noting that Bitcoin 1 is widely recognized as the first cryptocurrency that support basic smart contracts, in the sense that its transactions will be validated only if certain con- ditions are satisfied. However, designing smart contract with complex logic is not possible due to the limitations of Bitcoin scripting language that only features some basic arithmetic, logical, and crypto operations. 1 Bitcoin. https://bitcoin.org/.