What is smart contracts?

Smart contracts are digital way, how we can create specific conditions or functions built into the programming code. This idea was first described by Nick Szabo in 1996. For a deeper understanding, just imagine the situation, that you must go to a lawyer and you want to create some contract. The Lawyer gets paid for his service, that he created the contract with all terms according to the actual law. But it is 21 century and things like this will be soon only past. Thanks to the smart contracts idea, you can code any condition or function into the smart contract. This smart contract will be upload into a blockchain network, so no one can change or delete it. Also, you can check smart contracts wikipedia definition.

smart contracts, ethereum, ethereum DApps

How does it work?

All structure of smart contracts code is built by a programming language. Generally, it works very easy – once a smart contract is created and uploaded into blockchain network, no one can change it or edit. The example with the lawyer is very simple but it is possible to create much more complex functions. For example, you can setup-up all conditions, penalties, mathematic formulations and much more functions, what can you imagine. So, It can be used across a lot of parts of our lives or business.

Where to start?

Smart contracts are the main feature of Ethereum blockchain. By this feature, everyone can develop own DAOs, based and defined by a programming language. NEO and NEM have also smart contract function, where you can define exact conditions or functions but there are differences in network functions and programming language. The most used platform for creating smart contracts is Ethereum. You can look how many projects are actually at work on ethereum platform (see number of Erc20 Token Contracts).