What are smart contracts?
Smart contracts are defined as programs stored on the blockchain, and they work according to their instructions when they are stimulated by another activity on the blockchain, and they can be considered as implementation mechanism agreements between the various participating parties, including users, without the need for an intermediary to ensure the implementation of the agreement, as they are automatically executed Take the necessary step when certain conditions are met.
|What are smart contracts in the blockchain system and why are they important for digital currencies|
How and when did smart contracts originate?
Smart contracts are not a modern idea, as a design for them appeared in the work of "Nick Szabo", a computer scientist and cryptographer, during his graduation from the University of Washington in 1989 AD. He described smart contracts by saying: "With this, it became possible to create new institutions and new ways to organize The relationships that make up these institutions, through a digital revolution, I call these new contracts “smart” because they are more useful than their rigid paper predecessors.”
But the broader use of smart contracts in our time appeared with the launch of the “Ethereum” network, which was the first digital currency to allow smart contracts on the blockchain, and provided two types of accounts, the first type is private accounts, which are traditional addresses with a private key managed by users The second type is smart contract accounts, which are accounts managed according to the rules written in them, and they have some characteristics of special accounts, such as their ability to receive and send digital currencies, and since that time many digital currencies have appeared that allow smart contracts to be loaded onto the blockchain, such as Solana and Polkadot. And Cardano.
The most prominent applications of smart contracts
Many blockchain applications rely on smart contracts, most notably the following:
decentralized applications (apps)
These are applications that are uploaded to the blockchain and are managed automatically through a number of instructions set within smart contracts.
It is a type of digital currency, stock, or card that is managed according to a smart contract loaded on the blockchain, and the parent blockchain wallet is usually used to receive, send and store tokens.
It can be described as an Internet within the Internet, and it relies on decentralized applications to enable users to benefit from the Internet and obtain various services without the need to provide their data.
Non-Fungible Tokens or NFTs
They are symbols, each possessing a distinct identity, and they are used to sell artworks and preserve property rights.
What are the most prominent smart contract platforms?
Smart contracts can be taken advantage of and used across certain platforms, the most important of which are the following:
It is the largest blockchain in the world of smart contracts in terms of several variables, such as the size of the total locked value (TVL) and the number of decentralized applications and smart contracts based on them, and this has led to high mining wages known as “fuel” in Ethereum, due to the number of operations performed On the blockchain, many cryptocurrencies rely on the Ethereum blockchain, most notably Tether (USDT), Chainlink (LINK), Maker (MKR), and Shiba Inu (SHIB).
It has tried to solve the problems of speed and scalability with Ethereum and Bitcoin, which was launched in the year 2020l, and today more than 50,000 transactions are conducted on it daily, taking advantage of the speed of creating blocks and thus certifying transactions, on which several decentralized applications and prominent currencies depend.
Which is based on Proof of Stake (PoS) mining and hosts many decentralized applications, focusing on sustainability, scalability, and transparency.