Table of Contents
What is a smart contract?
What is a Smart contract-A smart contract is an agreement between two parties in the form of a self executing program. The smart contracts gets automatically executed doing away the need of any intermediary.
The smart contract including its terms and conditions of the agreement are written in the shape of a computer code unlike traditional paper contracts. Once executed they are irreversible and immutable.
What is a smart contract in crypto?
In the world of crypto, smart contracts are the self executing programs which run on blockchain network. They execute and store on the blockchain. It implies that smart contracts transaction history can be traced on the blockchain. It also makes the smart contracts transparent, irreversible and immutable.
Examples of Smart Contracts:
The examples of applications of smart contracts in crypto are: Initial Coin Offerings (ICOs), Decentralized Finance (DeFi) and Automated Market Makers (AMMs).
Why are they called smart contracts?
They are called smart because in a sense that they are self executing without requiring any intervention from the intermediaries unlike traditional paper contracts.
They are written as a piece of computer code and when certain conditions are met it gets executed automatically. This makes the contract smart.
Read why are BASE cryptos getting more attention
What is the use of smart contract?
Smart contracts serve different purposes for different industries, a few are listed below:
- Decentralized Finance (DeFi)- Like in borrowing, lending and farm yielding.
- Gaming and NFTs- NFT market places,powered by smart contracts, offer unique digital collections and NFT that are used in the games.
- Governance-For example, smart contracts are used in Decentralized Autonomous Organizations (DAOs) for activities like voting and decision making.
How are smart contracts stored?
Smart contracts are stored on the blockchain network. Blockchain is a decentralized ledger that stores data in the form of blocks across multiple nodes. Therefore, smart contracts, stored on the blockchain, are publicly visible and traceable. Once a smart contract gets executed after satisfying the particular condition, they can’t be changed or written off.
The information is stored in the form of blocks over the blockchain network. These blocks are decentralized, that is stored across multiple computers on network, making them immune to any tempering or willful editing.
What is smart contract in Ethereum blockchain?
A smart contract in Ethereum blockchain is a piece of code that is self executing. It is a program stored on the Ethereum blockchain. In nutshell, they are smart contracts specifically stored on the Ethereum blockchain.
You need to know the Attractive Benefits of Ethereum ETF Approval.
How does smart contracts work?
The basic principle behind the working of smart contracts is the condition logic statements. These conditions are usually expressed as following statements:
if this happens(condition):
then do this (instructions)When the condition is true, the instructions following the condition gets executed. The details of the transaction are then validated on the blockchain network.
Since, the condition gets checked automatically by the computer program, there is no involvement of any intermediator. This makes smart contracts smart from the traditional contracts.
Further, the history of transactions pertaining to the contracts are traceable over the network. They are public but immutable and anonymous.
Read: What are Real World Assets in Cryptocurrency world. They can explode in the upcoming bull run.
Explore: Top 10 AI Crypto coins. AI is the present and future!