I'm trying to do a deep dive on Smart Contracts and Ethereum. I came across a very intriguing article on use cases of Smart Contracts in a Chain Link blog post. However, I still don't have a strong intuition for why there is so much enthusiasm for Smart Contracts. I don't understand what benefit they offer as opposed to spinning up an EC2 instance in AWS and writting the same program logic but using Stripe and a real fiat currency. Here are a couple of examples that are confusing to me:
My best intuition for the "promise" of Smart Contracts is:
- Compared to using Stripe and a fiat currency, Ethereum can issue micropayments and has smaller transition fees.
- Cryptocurrencies seem to be (potentially) more developer-friendly compared to using Stripe and a fiat currency for finance-related software/scripts. For Stripe, there is overhead to signing up and their API isn't the most intuitive whereas Solidity is a pretty pleasant programming language.
- Compared to having to rely on the legal system to enforce a contract between two parties, which may be slower and more expensive, if all parties agree to a Smart Contract equivalent of the contract this is more efficient.
Things I am still confused on would like clarity on:
- I have heard of a Decentralized Autonomous Organization that uses an Ethereum smart contract to implement a revenue-sharing agreement between its stakeholders (i.e. as people pay for the service with Etherium, the smart contract pays 33% to Person A, 33% to Person B, and 33% to Person C). Why could you not do the same thing using Stripe and an EC2 instance? Why get Etherium involved at all?
- I have heard a lot of enthusiasm for how a lot of Internet of Things applications will have use cases for blockchain. For example, IoT sensors can be used to ensure that products in transit are properly maintained throughout the supply chain journey and connecting these IoT sensors to smart contracts that trigger payouts and issue fines depending on whether or not the IoT data confirms quality control standards were adhered to. Even for something as intriguing as this, what is the role of a Smart Contract here. Couldn't a third-party company offer these services and never need to get a Smart Contract involved?
Any intuition to point me in the right direction would be greatly appreciated.