As a beginner, you might want to know what smart contract is all about and why it is hyped in the world of blockchain technology. Well, this is because the smart contract is a type of technology that is still in revolution but has the potential to perform transactions and exchange value.
Yes, a smart contract makes the transfer of money, assets, or properties be done securely and transparently without the need for a middleman. Whatever problems we experience when using the traditional way for transactions have been eliminated by smart contracts.
This guide will help you understand the basics of smart contracts, the way it works, and how they can be applied.
A smart contract is referred to as a self-running code that comprises numerous instructions. These instructions are in a pattern of codes on the decentralized network of Ethereum blockchain technology.
The presence of a middleman or trusted third party is not needed to carry out a particular procedure between two groups
Beginning of smart contracts
this is a brief history of how smart contracts originated. In 1996, an American man called Nick Szabo known as a programmer created a notion of smart contracts. He defined smart contracts as digital programs which accurate algorithms to execute a specific transaction when actual predefined requirements are met.
After a few years, the invention of Ethereum technology creates a way for smart contracts to be adopted on its platform. Although they exist other blockchain platforms where smart contracts are used, Ethereum’s platform is common.
The way smart contracts work
In smart contracts, codes are stored on various blockchain platforms. These codes are also duplicated among all partakers on the blockchain platform, the codes usually obey certain instructions automatically and run them on their own.
The kind of transactions in which smart contract executes automatically to ensure that payment of funds is made when certain instructions are activated.
The smart contract also works in a way that when certain requirements are not met, then the group involved has to settle with a penalty.
Sectors where smart contracts can be applied
• Play to Earn Games: Virtual gaming like the warriorgame makes use of smart contracts to execute payment of rewards or money for playing games.
• Health sector: smart contracts can be used to store records of patients’ data and receipts on the blockchain network privately and also are used to carry out medical investigations confidentially.
- Banking Sector: maintenance of accounts records and daily transactions is made easy with the use of the smart contract.
In conclusion, A smart contract is a self-executing computer program that automatically enforces the terms of an agreement between two or more parties. It is based on blockchain technology and uses if-then logic to automate the performance of a contract. Smart contracts are transparent, secure, and tamper-proof, and can be used to facilitate a wide range of transactions, from financial trades to supply chain management. They eliminate the need for intermediaries, reduce transaction costs, and increase efficiency and trust in the contract process.
WarriorGame is one of the play-to-earn games that aims at using the open world’s abundant resources to give people a diverse range of services and provide creative ways to obtain revenue.
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