Smart Contracts [Video]

Smart contract functionality is at the foundation of the Ethereum blockchain. But what exactly are they, and how do they work?

Recently, Grand View Research reported that by 2024, the global blockchain technology market size is expected to reach USD 7.59 Billion.

This is not only indicative of the significant and growing interest in blockchain technology but also illustrates that no matter what the context, blockchain technology will impact your business and life — and soon.

In this guide, we’ll explore one of the most exciting and transformative uses of blockchain technology — smart contracts.

And the implications are fascinating. Let’s get started!

Smart Contracts Defined

If you’re starting here, you’re probably wondering: what exactly are smart contracts? What do they do? And, why are they important? Before diving in, let’s start with a simple definition:

Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.

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Benefits of Smart Contracts

Since smart contracts are written on a blockchain, they have some interesting advantages.

- Control

With a smart contract, you never need a middleman.

- Cost

Because smart contracts are self-executable, transaction costs are significantly reduced.

- Immutable (Unchangeable)

Blockchain technology replaces the need for a third-party by using an immutable verification process that executes instantly.

- Secure

The code is automatically encrypted and added to a blockchain ledger, providing an automatic backup.

- Speedy

Without middlemen, transactions are faster.

- New Models

Smart contracts ensure that the transactions are reliably performed as agreed upon, which means they can create new business/operational models, such as renewable energy trading.

Over to You

Although smart contract technology is still in its early stages, it’s receiving a lot of attention.

For example, even the largest financial institutions, including Goldman Sachs, are allocating resources toward smart contract research.

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