So we are back again with one of the renowned subsets of Blockchain, and that is smart contracts. When did the world get to know about this outstanding Contract? Well, it takes us back to 2018 when Ethereum emerged. Why you need to know about Ethereum is because smart contracts are the by-products of Ethereum. The currency also provides a Blockchain platform for the development of various decentralized applications. Smart Contract is one of the most talked-about things which the world is talking about. Not only has it transformed how does the industry works, but at the same time, it has provided a new way to execute transactions.
What Are Smart Contracts?
Before we head forward to understand how do smart contracts work, let’s have an understanding of what smart contracts are.
In simple words, smart contracts are the digital contracts which are pre-programmed to execute the payment, once the conditions are met. These contracts run on Blockchain and are stored in a public database, and once entered, they cannot be changed. These features make smart contracts a good choice for those who are looking for a hassle-free agreement execution.
How Smart Contracts Work?
Now let’s shift our focus to understand how to do smart contracts work. The working is quite simple; the two parties decide the terms and conditions of the agreement. This agreement is created on Ethereum Blockchain. Once the conditions are met, the Contract is pre-programmed to execute the transactions.
You must be wondering why Ethereum and not Bitcoin, when Bitcoin came way ahead of Ethereum, then you must know that Bitcoin is limited to the currency use case. On the other hand, Ethereum replacing Bitcoin’s more restrictive language with the ones which allow the developer to write their own programs. This flexibility makes Ethereum a much more suitable platform for smart contract creation.
Ethereum enables the developer to program their own smart contracts. These developers are also called as autonomous…