About Smart Contracts

In the field of cryptocurrency, smart contracts can be defined as applications or programs running on the blockchain. Often, they function as a digital protocol enforced by specific rules.

These rules are predefined by computer code, replicated and enforced by all network nodes. Blockchain smart contracts support the creation of trustless protocols. This means that both parties to the contract make commitments through the blockchain without needing to know or trust each other. The parties have determined that if the conditions are not met, the contract will not be executed.

In addition, using smart contracts eliminates the need for intermediaries, thereby significantly reducing operating costs.

Therefore, smart contracts have the following characteristics:

• Distributed: Smart contracts are replicated and distributed across all nodes in the Ethereum network. This is very different from other centralized server based solutions.

• Deterministic: Smart contracts only perform pre-designed actions when the requirements are met. And, the results remain the same regardless of who does it.

• Autonomy: Smart contracts are equivalent to "self-executing" programs that automatically complete various tasks. In most cases, unfired smart contracts remain "sleeping" and do nothing

• Immutability: Smart contracts cannot be changed after deployment. Smart contracts can only be "deleted" after specific functions are implemented. So, let's say that smart contracts provide tamper-proof code.

• Customization: Before deployment, smart contracts are coded in various ways. Therefore, it can be used to create a wide variety of decentralized applications (DApps). This goes hand-in-hand with the fact that Ethereum is a Turing-complete blockchain.

• Trustless: Two or more parties can interact through smart contracts without knowing or trusting each other. Additionally, blockchain technology will ensure that the data is accurate.

• Transparency: The basis of smart contracts is a public blockchain, so the source code is not only immutable but also transparent to everyone.