You know about Ethereum and how it differs from Bitcoin if you've read my previous article here. I spoke about Smart Contracts just a tad in that post, but never really dove into the topic. Today's the day where I do that!
I am not sponsored by anyone or anything mentioned in this article.
This is not financial advice. I am not a financial advisor.
Please do your own research before making any decisions before investing.
This article is meant for educational purposes only.
A Smart Contract is a self-executing protocol with the agreement terms within the buyer and seller directly written into the lines of code on the blockchain network. This self-executed code controls execution of a transaction, finalization, encryption, and storage of it. This is all possible due to decentralization of the crypto market and is transparent to any user who wishes to view the transaction. The contract cannot be altered in any way, shape, or form once the transaction is initialized, making it near-impossible for hackers to gain access and control the platform.
Ethereum is largely the most popular Smart Contract enabled platforms we have at the time of writing this article (and probably for the rest of our lifetime). The programming language utilized on the blockchain helps developers publish and/or build Distributed Applications (DApps). This open-source, decentralized platform allows you to conduct your daily transactions without the worry of power control, fraud, and third-party interference. You can also trade just about anything on this platform as well nowadays! Of course, always check to ensure that your wallet/exchange supports the Ethereum network prior to sending or receiving any coins or tokens!
Anyone can write a Smart Contract and deploy it on the Ethereum network. With the knowledge of Smart Contract coding and a bit of Ethereum in your wallet, you're all set! It's not as easy as it sounds though, as the coding language is far above my knowledgebase! Check it out for yourself here. Think of these Smart Contracts as little robots zooming around a massive network interacting with transactions across the globe. They can even define rules (i.e. regular contracts) and automatically enforce them via the prewritten code. Crypto AI? You tell me!
Smart Contract coding is similar to the automation software of traditional business standards, but they differ in one key aspect in my opinion... breaking boundaries. They enable the user with automated processes that go above and beyond any corporate boundaries and organizations. The code functions exactly as it was programmed to do and doesn't waiver to any person or thing. This ensures that the user can send any amount of money to anywhere in the world and any time of day or night. You no longer need to wait days for your bank to authorize your payment before you can spend it.
I hope you enjoyed this closer look into Smart Contracts and how they operate!
What's your favorite type of blockchain contract?
Let us know in the comments down below!
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