Introduction to Blockchain Technology
Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a decentralized network of computers.
Smart contracts are a crucial feature of blockchain technology because they enable the performance of credible transactions without third parties. These transactions are trackable and irreversible.
An example of a smart contract is a vending machine. When a customer inserts the correct amount of coins, the vending machine dispenses the product. The transaction is complete once the customer receives the product, and no third party is involved in the transaction.
Smart contracts can be built on different blockchain platforms such as Ethereum, Hyperledger Fabric, and Corda. These platforms offer different functionalities and are suitable for different use cases. The development of smart contracts involves writing code in a programming language that the blockchain platform supports. Solidity is a popular programming language for Ethereum smart contracts. The code is then compiled into bytecode, which is executed by the Ethereum Virtual Machine (EVM). The EVM ensures that the code is executed correctly and securely.
Smart contracts can be used in various industries such as finance, real estate, and supply chain management to automate processes and reduce transaction costs. They can also be used in decentralized applications (dApps) to enable peer-to-peer transactions without intermediaries.
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