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Get to know “Smart Contract”

Get to know “Smart Contract”

Smart Contract optimizes blockchain that can be used in various industries with an outstanding point of transparency. Smart contract enables everyone to write open-source programs on Blockchain for particular purposes.  

Smart Contract is also used for fundraising through initial coin offering (ICO). For example, an ERC-20 token is a cryptocurrency that is built on Ethereum (ETH) platform.

Anyone can create digital currencies or tokens by themselves through Smart Contract. The tokens can be distributed to investors through the ICO project or for free to project participants. Holders can use the coin as means of settlement or for any privileged gifts in various projects that are created by the coin creators. 

For instance, Project A needs to raise funds to develop a digital currency platform. It generates AA tokens with the white paper saying the fund raisers in the project will be awarded with free bitcoin trade and without trade fees. This privileged can be used through Smart Contract.   

Today, Ethereum competitors include Stellar, Cardano, and Neo. Neo is  dubbed “the Chinese Ethereum Killer”.

Nature of Smart Contract

Transaction information is normally stored in the form of decentralization and no one can change it. Therefore, it comes with transparency and transactions are fast and can store a huge amount of data.  

Some industries use blockchain to support their business; for instance, logistics companies use Smart Contract to track product details and to prove the authenticity of the products. 

Moreover, Smart Contract can be used to verify transactions such as payments. As for payments, normally there are intermediaries to confirm the verifications and transactions. But with Smart Contract on Blockchain, it can confirm and verify the transactions without intermediaries.

For example, when purchasing antiques, buyers can transfer tokens through Smart Contract, sellers can verify and confirm the tokens. After the verification, sellers can send code to buyers to pick up the items as appointed. 

In summary, Smart Contract is a tool that helps blockchain run exactly as they are set up to by their creators. The benefits of using smart contracts are: it cuts out the need for intermediaries; it makes transactions fast and transparent and it can store a huge amount of information and data. Smart Contract will be used more in the future.

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