Ethereum has garnered a name in the market which no other cryptocurrency has been able to capture. The Ethereum platform is directly responsible for the exponential growth of smart contract development, and it’s amazing uses. The smart contract has many uses that are exciting and practical uses. A smart contract in layman terms is a pre-specified set of instructions to be followed on the blockchain.
Here’s an example to understand Smart contract better; suppose there’s a transaction that’s about to take place on the blockchain, smart contracts come into play as soon as the specified conditions are met. Let’s take the instance of a real estate deal about to happen on Ethereum blockchain with ERC20 tokens.
The sender and receiver can specify certain conditions for the transactions to take place and other details. Smart contracts ensure that seamless transactions take place without any human intervention and with 100% accuracy in accordance to of the pre-defined instructions.
How smart contracts work
It’s worth noting that bitcoin was the first to support basic smart contracts in the sense that the network can transfer value from one person to another. The network of nodes will validate transactions only when certain conditions are met.
Ethereums’ underlying coding principles are less rigid than Bitcoin’s inner workings. This enables developers to modify and change the way conditions are set on the blockchain. The power to support a wide variety of instructions fares well with Ethereum as it’s far more advanced, and has broader capabilities than Bitcoin, the first cryptocurrency.
- Smart contracts can operate as ‘multi-signature’ accounts and this, and this enables the funds to be spent only after a certain amount of people agree to spend it.
- Handle agreements between users, if one buys insurance from the other provide utility to other contracts.
- Save information about an application, such as domain membership records or domain registration information.
With such advanced functionalities created by the arrival of smart contracts, it is time to develop something similar to feed in your entrepreneurial desires.