Detail Analysis Of Smart Contracts

This term is used in most of the recent articles and while applying it in cryptocurrency, one needs to know about it in detail. Here is the in-depth detail of Smart Contracts as they are self executable. As just entailed details about Blockchain Technology, it has also advanced the use of smart contracts. Various top cryptocurrencies also have now kept smart contracts base blockchains and are up to open world of possibilities in finance and other fields. Such cases aid in making cryptocurrencies with smart contracts a famous investment lead.

About Smart Contracts

These contracts are those programs which are mentioned on the blockchain and accordingly they self -execute being based on some conditions being fulfilled. Certain code is used by them for defining and implementing the rules of the contract. As smart contract is positioned, it runs autonomously and so no requirement of middlemen for assuring that contract is met.
Smart contract once made, exists on blockchain. Where, blockchain is public ledger which records each and every cryptocurrency transactions. The cryptocurrencies holding smart contracts potentiality have those blockchains which store smart contracts. These contracts allow cryptocurrencies for offering more than a definite role as digital currency which could transfer funds from certain point to a certain end. The blockchains having smart contracts could make entire system odecentralised finance (Defi) being functioning on their own with having any need of central governing body.

Working of Smart Contracts

All sorts of smart contracts could be converted to an if-then statement and in case more than one condition is met for accomplishing the terms of contract, then in that case the contract would come into being. For getting the clear cut picture of smart contracts, they could be explained with the help of an easy example, i.e. a vending machine. If accurate amount of money is inserted in it and a choice is being selected, then in that case the vending machine would dispense the chosen item. Also the terms of contract are clear and also the transaction tends to happen in its own manner.
Where a single contract is accountable for single action, multiple contracts on the other hand are accountable for handling more advanced tasks. This way the decentralisedapplications (dApps) work and aspire to make smart contracts much better. For instance, for acknowledging the working of dApp, one has to go through the decentralised crypto exchanges. As these crypto exchanges let their users to swap one cryptocurrency for another via multiple smart contracts. The situations in which swapping of smart contracts could take place are:

  • In case the user is asking for a trade of USD Coin (CRYPTO:USDC) for Compound (CRYPTO:COMP), in this case smart contract will grab the present price and would accordingly avail it to its users.
  • In case the user is accepting the transaction and is sending USD Coin, then in this case a smart contract would give back the compound.

Cases Involving Smart Contracts

The use of smart contract entails variety of industries as law, finance, and gaming too. Where finance for smart contracts is natural and they are often seen as building complex DeFi systems. Such base helps in giving same sort of services as financial institutions, but each of them is decentralised and are working on blockchain technology. The manner in which smart contracts could effectively give away the services which are finance based is by lending its own cryptocurrency funds into smart contract, alongwith a decentralised exchange so as to be a liquidity giver. Secondly, for giving the financial services with the help of decentralised exchanges which requires certain funds for facilitating cryptocurrency lending and trading. Last but not the least, as the liquidity provider tends to get a reduction of transaction fees as a reward for lending the funds based on cryptocurrency.
Therefore, with the help of line of smart contracts, a decentralised exchange acquires it with having no involvement of central governing body. There is no mediator involved in this as neither the banks are involved, nor the payment processors in the transactions. So with no interference of middlemen, users could trade cryptocurrencies, even lend or borrow and even earn interest. Therefore, smart contracts are best fitted for legal field, in case they are taken as legal binding contracts, in this case smart contracts could also become beneficial by timely cutting down and reducing costs which are included in conducting the business deals.
Smart contract is also used in recording and storing different information of NFT, where NFT is any specific digital asset being stored on blockchain.
Most of the NFTs are basically collectibles as digital art, also the Blockchain games as Axie Infinity have characters which are coming in form of NFTs. So when players ought to purchase a new character, they tend to buy an NFT and other information being saved on the blockchain in smart contract.

Advantages Of Smart Contracts

  • Cost Effective: Smart Contracts as described earlier are self executable and run on their own, the requirement of middlemen is also not required. Confirmation is also not required in case conditions of contract are fulfilled or even the contract is paid by their own, so smart contracts are clear that they could be used with not putting up unwanted fees for the same.
  • Fast: Smart Contracts are fast as they could be executed with immediate effect in case where conditions are fulfilled. The wait time doesn’t count much practically and this is the reason why contracts work efficiently for financial services and for trading of crypto too.
  • Transparent In Nature: There are clear cut terms and conditions with all sorts of contracts, for which each and every party is agreed and could also easily review. Also as smart contracts are irreversible so when they execute, nobody could end up disputing the results.
  • Trustworthy: Smart contracts are having the ability to remove the possibility of bias which affects an agreement. Such terms couldn’t be figured out for favouring either side.

Manner Of Writing A Smart Contract

First and the foremost thing for Smart Contract is that they help in making decisions on blockchain stocks and in “which Cryptos to be purchased”. To use smart contract, one has to be clear about where to write the same. So there are various cryptocurrencyblockchains having smart contract functionality. Therefore depending on the blockchain to be used, smart contract is to be written.
Here are some of the major cryptocurrencyblockchains so as to write a smart contract:

  • Ethereum (CRYPTO:ETH): This introduced smart contract potentiality by using blockchaintechnology, which helped in making it the second largest cryptocurrency and one of the famous base for building dApps. Therefore, the smart contract base is being recalled as Ethereum Virtual Machine( EVM) and ‘Solidity’ as its programming language.
  • Solana (CRYPTO: SOL)This is so formed to be the fastest blockchain and could take care of 65,000 transactions per second. The three programming languages being used by it are C, Rust and C++.
  • Cardano(CRYPTO: ADA): This is the first blockchain base which was so found on the basis of research based on peer review. As smart contract base, it is being called as Plutus and ‘Haskell’ as programming languageDomain-specific language of it, is known as Marlowe, with connection to smart contracts.

To be more precise, once a blockchain is chosen, the website is to be visited and then after the section of building a smart contract has to be chosen. Each and every large blockchain have enough of the educational information and guide amongst their own resources. So, it’s better to review the information which is given by a particular blockchain, inorder to effectively learn the manner of writing a smart contract.
Smart contracts have also contributed in becoming motivation for the people in using blockchain technology and as well becoming more interested in investing in cryptocurrency due to its above mentioned benefits and as well its uses concerning blockchain. 

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