Introduction

● Do you know what smart contracts are? If yes, you might know how it is being used in major sectors like Finance, Healthcare, Real
Estate, Automobile, Supply Chain, and Management. Even the Government is planning to use it for elections.

● But it was first introduced in the crypto market. Do you know the technology behind crypto trading? The main technology is
blockchain. But nowadays, trading platforms are using smart contracts to facilitate crypto trade. N. Ameria

● White label cryptocurrency exchange uses smart contracts to facilitate crypto trade. Do you know how ICO tokens are created and
sold? It is done by using smart contracts. It is safe to say that smart contracts have become a very important part of the crypto
market and crypto trading.

● Many people still don’t have any idea about smart contracts. So in this post, we are going to help you understand what exactly
smart contracts are. We are also going to discuss how it is reacted to trading in the crypto market.
Smart Contracts

● In technical terms, it is a computer protocol. This protocol works like a contract. It is like a digital contract. Do you know how a
contract works? In a contract, two parties agree to certain terms and conditions. Once these conditions are met, the contract is
executed.

● Similarly, a smart contract is a computer program which works on the blockchain. Here the terms and conditions are written in
codes. When the terms and conditions are fulfilled by both parties, the contract gets executed on its own. Once the contract is
N. Ameria
executed, it is updated across the blockchain network.

● The idea was coined by Nick Szabo. He was a cryptographer. In 1994, he taught of using computer codes to write contracts and
make it digital. However, it took 21 years for this idea to be implemented. In 2015, the first smart contract was developed. It was
done by Vitalik Buterin. He is the founder of Ethereum.

● A smart contract basically can be understood with the help of these three terms.

1. Agreement: It is an agreement between two parties. The agreement is in the form of a written code. It runs on the blockchain.
These codes are stored in a public ledger, which everybody can see but cannot be changed.
2. Processing: The blockchain network processes the transaction agreement. There is no third party or mediator involved.
3. Execution: Once the conditions of the contract are met, it gets executed automatically. There is no one to stop or intervene.

● If you still have doubts about smart contracts, this example will help you.
 Interesting, right?
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