What Are Ethereum Smart Contracts?

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What Are Ethereum Smart Contracts?

A smart contract is just a unit of functionality that you load into EVM. The term “distributed application” or dapp usually describes a front-end application with a graphical user interface that is available for the web or smartphones, which uses EVM as a backend. Unless this is a very simple dapp, its backend functionality will rely on several smart contracts.

A transaction can be called an operation that builds on the pattern “if … then …”. The same thing can be called a contract, a contract, conditions – as anyone is accustomed to. In life, we make deals all the time and not only about money: “If I help you write a diploma, you will give me your PlayStation to play,” “If I lose weight by the summer, I will buy myself a ticket to Maldives” etc.

The main problem of transactions – no one can guarantee the fulfillment of their conditions. Helped a friend with a diploma, and PlayStation was not allowed to play – sit down, take offense, write to the sport lot. I bought a ticket to Maldives and flew there in bold – it’s generally a pleasure to break deals with myself. So thought the creators of Ethereum. And they called it smart contracts.

The smart contract prescribes the reinforced concrete conditions under which the token operates. It is not possible to change these conditions. For example, if you submit a smart contract in the insurance industry, it will look like this. A person who wants to ensure buys a company token. This token gives the right to receive insurance payment upon the occurrence of certain conditions (ie, the fact of an insured event). As a result, the implementation of the token will occur in any case, the insurance company will not be able to rewrite the smart contract and refer to any conditions that cancel the contract.

To date, created a huge number of tokens that operate on the basis of the Ethereum platform, the largest of them: EOS, TRON, VeChain, OmiseGO, ICON.

What is the meaning of smart contracts?

A smart contract is an agreement between the participants of the system that does not provide for revision, i.e. once prescribed, it cannot be changed by any party in its own favor, which means there is no opportunity to trick or deceive any of the participants. Figuratively speaking, a smart contract is a perfectly honest arbiter, it is pointless to dispute it in court because it is simply impossible (in life there may be situations where one of the parties proves that he signed a contract under pressure, in smart contracts this factor is excluded).

A smart contract is an algorithm that is prescribed and approved before it enters the market. It clearly declares the issue of interaction between the parties, specifies penalties and the conditions under which they will be applied. Those. A smart contract is a contract, accepting which the parties clearly follow it without the possibility of changing the conditions.

Who performs smart contracts and how?

It is difficult to understand the entire Ethereum at once, because many things in it are cyclically dependent on each other, unlike Bitcoin. So, smart contracts have a lot of restrictions that are associated with the features of Ethereum-blockchain, which, in turn, guarantees the execution of these smart contracts.

So first, let’s look at the smart contracts, and I’ll tell you about the changed blockchain Ethereum and other things so far incomprehensible below. I promise. Technically, smart contracts are better perceived not assigning a contract, but as the execution of pieces of code. In fact, the contract is the stupid code, the result of which is forever fixed in the blockchain.

A contract can be invoked as a function by performing an online transaction to its address — it will return the result or error to you.

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.