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Smart Contracts Explained [Infographic]

by | Apr 10, 2022 | Blockchain

If you are into Crypto mining or staking or any other blockchain technology you might have heard already about a smart contract.
A smart contract is nothing else than a script implementation of a paper-based contract and ensures that it goes into effect when certain conditions are met in the world around blockchain.

Let me start with some typical words which I use a lot; Did you know …?

Smart contracts exist in the form they are used today in the blockchain already since Nick Szabo, a computer science/law major penciled out the idea back in 1994 in his paperwork. His basic idea was that all contract conditions can be put into a process utilizing protocols and user interfaces to fulfill the conditions of the smart contract.

Later in 2013, the co-founder of Ethereum Vitalik Buterin uploaded a whitepaper ‘Ethereum: The Ultimate Smart Contract and Decentralized Application Platform’ to his blog. Vitalik introduced and implemented the concept of smart contracts into the Ethereum blockchain system, opening the world to the use of smart contracts.

Current smart contracts used in blockchain resemble scripts that implement conventional pen & paper contracts with digital code lines and execute the contract when a certain set of promises on predefined conditions are met.

Using a smart contract between two parties allows them to be completely anonymous to each other; this is because the contract does not take effect if certain conditions are met. Talking about establishing a contract we can see the easy element here, signing a smart contract allows it to go into motion without a middleman. However, it did introduce the powerful concept of decentralization.

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