What are Intelligent Contracts?

Remember the analogy of a vending machine to a smart contract in our last blog post? You put in a coin, and the machine gives you a snack. It’s pretty basic and follows the simple instruction: “When coin inserted, give out snack”. But what if you had a ultra-high-tech vending machine that could do way more? It could check the weather, adjust prices based on inflation, and even solve a math problem for you! That’s what GenLayer’s Intelligent Contracts are – an upgrade from the classic vending machine to an intelligent one.

What Can Intelligent Contracts Do?

Search the Internet: Imagine the vending machine summarizing news or showing weather forecasts. Similarly, Intelligent Contracts can search the web for any information, like checking sports scores or weather reports.
Make Complex Decisions: Just like a smart vending machine that can adjust prices based on current inflation without humans involved, Intelligent Contracts can analyze vast amounts of data and make complex decisions all by themselves. For instance, they can decide on investments based on monetary policies and financial reports.
Understand Natural Language: What if you could just tell the vending machine what you want, and it would understand? Intelligent Contracts have the same capabilities. You can give them instructions in any language, like English. “Pay John if it rains tomorrow,” and they’ll know exactly what to do!

How Do They Work?

Remember the static nature of blockchains? They always give you the same output for the same input. Creating a dynamic blockchain so far wasn’t possible because there was no technical solution to this problem. Now, Intelligent Contracts make the previously impossible possible through Large Language Models (LLMs). Think of these as the “brains” behind the smart vending machine. These LLMs allow the contract to read information from the web, understand any language and make complex decisions.

But it doesn’t stop there! Instead of relying on just one “brain,” multiple AI-powered validators work together to double-check the information. This teamwork makes sure that the contract is not only smart but also trustworthy. It’s like having several vending machines that all agree on the price before giving out a snack. In case one machine gets the wrong price from the internet, the others can step in and correct it.

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