EVM

smart contracts

Ethereum

Sep 12, 2023

what is a smart contract?

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A smart contract is a digital tool that automates transactions or agreements between multiple parties, eliminating the need for a trusted third party such as a legal advisor or financial institution. Imagine Satoshi wants to reward Vitalik for completing certain milestones in a collaborative project. Satoshi could set up a smart contract that:

  1. Tracks the completion status of project milestones

  2. Automatically transfers a predetermined reward to Vitalik upon each milestone's completion

  3. Ceases operations when all milestones are complete or when the allocated funds are depleted

By leveraging a smart contract for this purpose, Satoshi obviates the need for an intermediary, making the process both transparent and reliable.

Built on 'if-then' logic, smart contracts execute actions when certain predetermined conditions are met. These contracts can be linked together to form a Decentralized Application (Dapp), which enables more sophisticated functions and processes, extending the potential for automated digital agreements and transactions.

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