This guide to smart contracts analyzes what these smart contracts are? The various applications are also investigated.
Blockchain technology is an outstanding gem that has emerged from the advances in cryptography and computer science. As a revolutionary innovation with the potential to destroy existing systems and a variety of industries, it is rapidly gaining level of importance. One of Blockchain’s most exciting developments is the evolution of smart contract technology. This article is dedicated to the discovery of the concept of smart contracts and technologies.
What is a Smart Contract?
Smart contracts are contracts that are pre-programmed with a set of definitive rules and regulations that are executed automatically, without the need for intermediaries. Therefore, for any given input there will be a known output.
Smart contracts are the equivalent in the blockchain of an Application Programming Interface (API) in a traditional web environment. An application programming interface (API) is a set of functions and procedures that enable users to interact with an application. Allows applications to communicate with each other. API is mainly used to develop various applications and software functions.
To understand the concept of the API, let’s look at a simple analogy. Imagine sitting in a restaurant and looking at the menu. After the waiter has registered the food you ordered, he sends the order to the kitchen. Your meal has been cooked, the waiter brings your food to your table. In this case you are the user of the application, the kitchen is the computer system (which executes all commands and requirements) and the waiter is the API. The waiter is the messenger who receives your order (requests) and tells the kitchen (computer system) what to do. API therefore facilitates communication between different software components and applications.
The Smart contract connects the decentralized blockchain database (which in our example replaces a conventional centralized database) to the front-end application, which is a decentralized application (dAPP) in the blockchain. The dApp uses one or more smart contracts, each of which allows different functions or transactions to communicate with the blockchain. For example, in a financial application, a smart contract could allow the dAPP user to send and receive funds, while another smart contract might schedule a payment plan. Here is a visualization of a smart contract application:
These transformative tools change the game for those looking for a more efficient and credible process for contracts of all kinds.
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