CryptoCoinsInfoClub.com

Ethereum Smart Contracts Explained

Smart Contract - Wikipedia

Smart Contract - Wikipedia

This article has multiple issues. Please help improve it or discuss these issues on the talk page . This article possibly contains original research . Please improve it by verifying the claims made and adding inline citations . Statements consisting only of original research should be removed. This article may be confusing or unclear to readers. Please help us clarify the article . There might be a discussion about this on the talk page . ( Learn how and when to remove this template message ) A smart contract is a computer protocol intended to facilitate, verify, or enforce the negotiation or performance of a contract . Smart contracts were first proposed by Nick Szabo in 1996. [1] Proponents of smart contracts claim that many kinds of contractual clauses may be made partially or fully self-executing, self-enforcing, or both. The aim with smart contracts is to provide security that is superior to traditional contract law and to reduce other transaction costs associated with contracting. Smart contracts have been used primarily in association with cryptocurrencies . One real-world smart contract that gained mainstream coverage was The DAO , a decentralized autonomous organization for venture capital funding, running on Ethereum , which was launched with US$250 million in crowdfunding in May 2016 and was hacked and drained of 3,689,577 ETH three weeks later. [2] The phrase "smart contracts" was coined by Nick Szabo in 1996, and reworked over several years. Szabo's first publication, "Smart Contracts: Building Blocks for Digital Free Markets" was published in Extropy #16, [3] and then later reworked as "Formalizing and Securing Relationships on Public Networks." [4] These documents described how it would be possible to establish contract law and related business practices Continue reading >>

Blockchain For Non-techies: 3. Smart Contracts

Blockchain For Non-techies: 3. Smart Contracts

Blockchain for non-techies: 3. Smart contracts This is the third post in a series on blockchain technology, where I give a non-technical introduction. In the first post I focus on agreement, and in the second post I explain how blockchains work. Smart contracts are an important part of the enthusiasm surrounding blockchain technology, so in this post I will explain what a smart contract is. But first, lets quickly recap of the magic analogy I use in my previous post to explain a blockchain. A public blockchain can be imagined in the following way: An identical agreement is written on a set of enchanted documents Anyone can take part in maintaining this agreement by owning one of these documents Rules describe the changes you are allowed to make to a document Any valid change to one document is automatically made to all the other documents These properties result in each participant owning an identical copy of the same agreement, even though the agreement undergoes continuous change. The magic analogy above describes one set of enchanted documents (blockchain) that follows one set of rules. Different sets of enchanted documents have different rules for what changes are valid. The original set of enchanted documents is called Bitcoin, the rules for this set of documents are: Each enchanted document contains a list of all accounts and balances. People own accounts, and can send their own bitcoins to other accounts. In essence, these rules create a digital cash. Below is an illustration of one of the enchanted documents maintained across the Bitcoin network. The number next to each account denotes the amount of bitcoins in that account. Another set of documents is called Ethereum. The enchanted documents that make up Ethereum follow very similar rules to Bitcoin: Each ench Continue reading >>

Smart Contracts, Explained

Smart Contracts, Explained

Everything you wanted to know about smart contracts. Everything you wanted to know about smart contracts. A smart contract is a protocol for regulating contracts. A smart contract is a special protocol intended to contribute, verify or implement the negotiation or performance of the contract. Smart contracts allow to perform credible transactions without third parties. These transactions are trackable and irreversible. Smart contracts contain all the information about the contract terms and execute all envisaged actions automatically. The idea was originally described by computer scientist and cryptographer Nick Szabo in 1994. He defined the main principles of work, but at the time there was no appropriate environment to realize them. A lot has changed since Blockchain technology emerged. Bitcoin laid the basis for contracting on the Blockchain. However, its tools couldn't meet all needs. The appearance of Ethereum put smart contracts into operation for everyone, giving further impetus to dealmaking. The main principle can be compared to the work of vending machines. They execute only the instructions given to them automatically. At first, assets and contract terms are coded and put into the block of a Blockchain. This contract is distributed and copied multiple times between the nodes of the platform. After the trigger happens, the contract is performed in accordance with the contract terms. The program checks the implementation of the commitments automatically. What do I need to create a smart contract? The program must have access to goods or services under contract to lock and unlock them automatically. All the participants initiate an agreement by signing the contract with their private keys. Terms of a smart contract take the form of an exact sequence of operatio Continue reading >>

How Do Smart Contracts Work? Bitcoin And Ethereum

How Do Smart Contracts Work? Bitcoin And Ethereum

Tags: bitcoin , blockchain , ethereum , smart contracts This article assumes a basic understanding of blockchain technology in order to fully understand how smart contracts work. Blockchain-based smart contracts have generated ample buzz recently as they could eventually build entirely autonomous organizations , enable self-regulated peer-to-peer insurance models, and facilitate the renting of all internet-connected-things . This article explores how smart contracts work. It provides a brief primer on the topic, then compares the coding, storage and execution of smart contracts on Bitcoin and Ethereum, the two permissionless blockchain protocols that have achieved scale thus far. While plenty of healthy skepticism still exists around smart contracts, ARK Invest believes Bitcoin and Ethereum will be instrumental in validating the potential of this budding innovation. A smart contract refers to coded logic that moves digital assets when triggered by necessary events. It is akin to a series of IF, THEN statements, where the ifs are preconditions that must be met in order to trigger the thens. The idea fits well within blockchain technology because blockchains offer a guarantee of future execution, in a decentralized manner, 1 once the smart contract logic is stamped within a block. The term smart contracts often puts mental imagery of complex documents in peoples minds, which ARK believes is misleading. This misconception explains why Mike Hearn, an early pioneer within the Bitcoin space, called smart contracts a misnomer in a November 2013 conversation on the matter. While he preferred the term conditional payments, ARK prefers broadening the term to conditional transactions to capture the idea that this technology can facilitate more than the transfer of money for goods Continue reading >>

What Is Blockchain And Smart Contracts? Brief Introduction

What Is Blockchain And Smart Contracts? Brief Introduction

What is Blockchain and Smart Contracts? Brief introduction All this hype has been rising exponentially, however, most of the people know nothing about how blockchain technology works, what is a smart contract and how it could be used. For this very reason, I decided to give a gentle introduction to blockchain technology. Blockchain. What is it and how does itwork? Blockchain is a decentralized distributed ledger. Speaking in a human language it is a network of computers having an identical copy of the database and changing its state (records) by a common agreement based on pure mathematics. It means, that there is no need for any central server or agent to trust to. The blockchain is the technological base for all those names like Bitcoin, Ethereum, Hyperledger. Lets compare two most popular blockchain networks. Bitcoin has been dominant in the cryptocurrency field for a long time and is not planning to stop. It was launched with the intention to bypass government regulations and create online payments without the need of intermediary to confirm transactions. Ethereum is another cryptocurrency project, however with much greater possibilities. Ethereum introduced so-called smart contracts and a way to perform actions by the rules defined in the contract. Simply speaking Bitcoin is a platform for decentralised currency while Ethereum is a platform for decentralised currency and most important engine for applications which can be run without a need of trusted third party (some central server). I personally like the analogy of the Ethereum as a global computer to which anyone has access to. Smart contract is a piece of code which is stored in the blockchain network (on each participant database). It defines the conditions to which all parties using contract agrees. So if r Continue reading >>

This Is How Smart Contracts And Ethereum Work. Brief Introduction

This Is How Smart Contracts And Ethereum Work. Brief Introduction

Developing Blockchain & Smart Contracts PoC and MVP for ICO startups and established companies This is How Smart Contracts and Ethereum Work. Brief Introduction Blockchain technology is gaining momentum and making its way into our daily news, drawing the attention of the worlds leading companies. However, I see a lack of simple and easy to understand content for people to learn about smart contracts. Thats why I started writing simple articles for newcomers to the blockchain. Check my previous article where I introduce Blockchain and Smart Contract in a simple manner. This article is a review on how to execute a smart contract, how does smart contract communicates with the outer world and the use case that is trending in the Ethereum network for the past few months. The smart contract is a piece of code, which is executed on the computers in the network. All computers (miners) executing the code must come to the same result and reach a consensus. In such way, we can be sure that the code was executed as it should be. But the main question is what motivates the computers to execute a smart contract? Ethereum blockchain came with a term Gas. Gas is a unit, which represents the amount paid for the code execution. Along with some smart contract function call, you have to declare the amount of gas and pay for it. This motivates miners to run your code and earn money for that. Depending on the logic within the code, the gas price varies as well. You should treat Ethereum as a global server, where you pay for each transaction instead of monthly fee for some central server provider. The gas as well motivates developers to write efficient code so that it would require less gas for the execution. All the basic applications we use daily integrates with various external services ( Continue reading >>

Smart Contracts Explained: Unleashing The Power Of The Blockchain

Smart Contracts Explained: Unleashing The Power Of The Blockchain

Smart Contracts Explained: Unleashing The Power Of The Blockchain Image Credit: Smart contracts connect the blockchain to the real world. They allow you to open your front door, turn on your washing machine, charge your electric vehicle, or send funds abroad all without lifting a finger. On a bigger scale they could secure voting, update medical records, and speed up supply chains. Theyre the key to decentralization, and a trustless mechanism for transacting almost any kind of business through the blockchain, including altcoin trades. Well, the term smart contract is a bit of a misnomer. First coined in 1996 by Nick Szabo, computer scientist and cryptographer, he defined a smart contract as: a set of promises, specified in digital form, including protocols within which the parties perform on these promises. In other words, a smart contract is a piece of code on the blockchain that performs an action once certain criteria are met. You can think of it as if this, then that logic, though certain blockchains, such as Ethereum, allow much more complex programming. Once the action is done, its added to the blockchain as a permanent record. While smart contracts are extremely useful, theres nothing particularly smart about them. There are no fancy machine learning algorithms, for example. In fact, smart contracts work best in constrained circumstances, where the code is less prone to unexpected outcomes or bugs after all, once the action is performed it cant be undone. Neither are they contracts in the traditional sense. Theres no legal bearing other than whats written into the code, and no legal precedent. Either the conditions for the code to run are met and the action performed, or nothing happens at all. Because smart contracts exist on the blockchain, you can program cod Continue reading >>

The Hitchhikers Guide To Smart Contracts Inethereum

The Hitchhikers Guide To Smart Contracts Inethereum

The Hitchhikers Guide to Smart Contracts inEthereum Updated Oct 6th 2017, for Truffle v3.4.11 and Solidity v0.4.15. Ive been working with smart contracts for 4 years , mainly in the Bitcoin blockchain. Some projects I participated in are Proof of Existence , bitcore , and Streamium . In the past months, Ive been exploring and working with the Ethereum platform. Ive decided to compile a short guide to ease the way of future programmers learning Ethereum smart contract development. Ive divided the guide in two sections: how to get started building smart contracts in Ethereum, and a quick note on smart contract security. Getting started with Smart Contracts onEthereum This guide assumes you have a basic level of technical understanding on how cryptocurrencies and blockchains work. If you dont, I recommend skimming over Andreas Antonopoulos Mastering Bitcoin book , Consensys Just Enough Bitcoin for Ethereum guide , or at least watching this short video by Scott Driscoll . To continue ahead you should know what a public and private key are, why a blockchain needs miners, how decentralized consensus is reached, what a transaction is, and the concepts of transaction scripting and smart contracts. Two other important and related concepts youll need to understand before working with Ethereum are the Ethereum Virtual Machine and gas. Ethereum was designed as a smart contract platform. Its origin is actually linked to a critique made by Vitalik Buterin on bitcoin as a very limited smart contract platform. The Ethereum Virtual Machine (EVM) is where smart contracts run in Ethereum. It provides a more expressive and complete language than bitcoin for scripting. In fact, it is a Turing Complete programming language. A good metaphor is that the EVM is a distributed global computer wh Continue reading >>

Blockchain 101: How To Explain Smart Contracts To Your Mom

Blockchain 101: How To Explain Smart Contracts To Your Mom

Blockchain 101: How to Explain Smart Contracts to Your Mom Smart contracts have the potential to transform the way we do business. But what exactly is a smart contract, and how does it work? Those of us in the tech world are constantly serving as translators, explaining technical concepts to our less-technical co-workers, friends, and family. This is especially tough when it comes to emerging technology that can potentially change the way we do business, like blockchain. Have you tried explaining blockchain to your parents? If so, you mightve spent a good bit of your time reassuring them its much bigger than just Bitcoin and the Silk Road. Smart contracts in particular have the potential to provide tangible business value and transform the way we do business. But what exactly is a smart contract? About 25 years ago, legal scholar and cryptographer Nick Szabo came up with the idea of a smart contract. To make the concept accessible for people who didnt know much about cryptography, he offered the analogy of a vending machine. A vending machine is a physical device that implements the conditions of an agreement like this: If you dont put $2 in, soda doesnt come out If you dont put $2 in and soda still comes out, thats bad The vending machine encodes this set of rules and keeps it somewhat secure (or at least as secure as it needs to be to to protect soda bottles). The idea of a smart contract is similar. Its a computer program that directly controls digital assets using the conditions of an agreement. The kind of direct control here is important: its not a computer program that makes a recommendation to a guy about how the guy should control the digital asset. Its a program that controls a digital asset. Today, Szabos concept of the smart contract is becoming a reality, Continue reading >>

Smart Contracts For Dummies Freecodecamp

Smart Contracts For Dummies Freecodecamp

If you still dont get what the heck a Smart Contractis Ok, you know a bit about Bitcoin (see: Explain Bitcoin Like Im Five ). Youve been seeing the blockchain on the news. But whats this new Ethereum thing? Apparently its this crypto-currency you can use to build smart contracts. Sounds impressive. So, uh what are they again? (Spoiler: Theyre not that smart. And theyre not really contracts!) Instead of a one line definition, lets try to get an intuition. First, well revisit the blockchain and the word trust. Then, well talk about the word contract. Understanding both words is the secret. Most of the time, when we think Bitcoin (or Ethereum), we have a mental image of, wellcoins. Arent these crypto-currencies after all? Isnt that the whole point? In our minds we see objects digital gold, or silver (or tulips for the skeptics). Because these images are easy to understand, we forget a bit about that thing thats underneath it all. So, I say we start thinking about this in a different way. Ugh, really? Digital rocks? Actually, rocks are pretty useful. We have this idiom in the english language that goes something like this: set it in stone. Ive reviewed the contract Bob. Looks good. Lets set this instone! Dont get too excited Alice, nothings in stoneyet. This is God. Ive written my 10 commandments on these two stone tablets. You know. Just in case ya'll start getting any funnyideas. This metaphor continues to have meaning in a modern world because in the physical (ancient) world, stone had some interesting properties: When you carve something on stone there is a physical finality and permanence to it. You cant make changes just like that. If you try to erase something later on, itll be obvious. Any changes you make to it are quite transparent and tamper proof (provable). Th Continue reading >>

How Do Ethereum Smart Contracts Work?

How Do Ethereum Smart Contracts Work?

Like many ideas in the blockchain industry, a general confusion shrouds so called 'smart contracts'. A new technology made possible by public blockchains, smart contracts are difficult to understand because the term partly confuses the core interaction described. While a standard contractoutlines the terms of a relationship (usually one enforceable by law), a smart contract enforces a relationship with cryptographic code. Put differently, smart contracts are programs that execute exactly as they are set up to by their creators. First conceived in 1993, the idea was originally described by computer scientist and cryptographer Nick Szabo as a kind of digital vending machine. In his famous example , he described how users could input data or value, and receive a finite item from a machine, in this case a real-world snack or a soft drink. In a simple example, ethereum users can send 10 ether to a friend on a certain date using a smart contract (Seeour guide" What is Ether? "). In this case, the user would create a contract, and push the data to that contract so that it could execute the desired command. Ethereum is a platform thats built specifically for creating smart contracts. But these new tools arent intended to be used in isolation. It is believed that they can also form the building blocks for 'decentralized applications' (See: " What is a Dapp? ")and even whole decentralized autonomous companies (See:" What is a DAO? ') Its worth noting that bitcoin was the first to support basic smart contracts in the sense that the network can transfer value from one person to another. The network of nodes will only validate transactions if certain conditions are met. But, bitcoin is limited to the currency use case. By contrast, ethereum replaces bitcoin's more restrictive langu Continue reading >>

Everything Youve Ever Wanted To Know About Ethereum, Patiently Explained

Everything Youve Ever Wanted To Know About Ethereum, Patiently Explained

Everything youve ever wanted to know about Ethereum, patiently explained Although Bitcoin and Ethereum are terms that are often paired together, the reality is that they are vastly different.The only thing Ethereum shares with Bitcoin is that its a cryptoasset running on top of blockchain. Instead of being just a cryptocurrency, like Bitcoin, Ethereum also has features which effectively makes it a huge decentralized computer. To understand Ethereum , one must understand how blockchain works. If you already understand it, or have already read my ultimate guide to understand blockchain , feel free to go directly to the next section. A blockchain, simply put, is a database. Its an ever growing database of certain kind of data and has quite remarkable properties: Once data is stored in the database, it can never be modified or deleted. Every record on a blockchain is permanent for eternity. No single individual or organization maintains the database; several thousand individuals do, and everyone has a copy of the database with themselves. To understand how several people are able to keep their copies of the database in sync with everyone else, imagine there are ten individuals in a network. Everyone is sitting with an empty file folder and an empty page in front of them. Whenever anyone does something important in the network, like transferring money, they announce it to everyone in the network. Everyone makes a note of the announcement on their pages until the page is filled. When it does, everyone has to seal the contents of the page by solving a mathematical puzzle. Solving the mathematical puzzle ensures that everyones page had same contents and that they can never be modified. Whoever does it first, gets rewarded with some amount of cryptocurrency. Note: Want to know Continue reading >>

What Are Smart Contracts? A Beginners Guide To Smart Contracts

What Are Smart Contracts? A Beginners Guide To Smart Contracts

One of the best things about the blockchain is that, because it is a decentralized system that exists between all permitted parties, theres no need to pay intermediaries (Middlemen) and it saves you time and conflict.Blockchains have their problems, but they are rated, undeniably, faster, cheaper, and more secure than traditional systems, which is why banks and governments are turning to them. In 1994, Nick Szabo , a legal scholar, and cryptographer , realized that the decentralized ledger could be used for smart contracts, otherwise called self-executing contracts, blockchain contracts, or digital contracts. In this format, contracts could be converted to computer code, stored and replicated on the system and supervised by the network of computers that run the blockchain. This would also result in ledger feedback such as transferring money and receiving the product or service. Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, drivers license, or whatever drops into your account.More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations. As Vitalik Buterin, the 22-year-old programmer of Ethereum, explained it at a recent DC Blockchain Summit , in a smart contract approach, an asset or currency is transferred into a program and the program runs this c Continue reading >>

An Introduction To Ethereum And Smart Contracts: A Programmable Blockchain

An Introduction To Ethereum And Smart Contracts: A Programmable Blockchain

An Introduction to Ethereum and Smart Contracts: a Programmable Blockchain Bitcoin took the world by surprise in the year 2009 and popularized the idea of decentralized secure monetary transactions. The concepts behind it, however, can be extended to much more than just digital currencies. Ethereum attempts to do that, marrying the power of decentralized transactions with a Turing-complete contract system. In this post we will take a closer look at how Ethereum works and what makes it different from Bitcoin and other blockchains. Read on! In our previous post , we took a closer look at what blockchains are and how they help in making distributed, verifiable transactions a possibility. Our main example was Bitcoin: the world's most popular cryptocurrency. Millions of dollars, in the form of bitcoins, are traded each day, making Bitcoin one of the most prominent examples of the viability of the blockchain concept. Have you ever found yourself asking this question: "what would happen if the provider of this service or application disappeared?" If you have, then learning about Ethereum can make a big difference for you. Ethereum is a platform to run decentralized applications: applications that do not rely on any central server. In this post we will explore how Ethereum works and build a simple PoC application related to authentication. A blockchain is a distributed, verifiable datastore. It works by marrying public-key cryptography with the nobel concept of the proof-of-work. Each transaction in the blockchain is signed by the rightful owner of the resource being traded in the transaction. When new coins (resources) are created they are assigned to an owner. This owner, in turn, can prepare new transactions that send those coins to others by simply embedding the new owner Continue reading >>

Ethereum Smart Contract Explained

Ethereum Smart Contract Explained

Smart contracts is the technology used by Ethereum and many other altcoins. Smart contracts play a role of an immutable digital notary that proves the ownership of any document without any third-party governance. In todays article wed like to look in details at what is a smart contract and how it works for Ethereum. When bitcoin was implemented into our lives, it proved that its really possible to exchange goods over the internet without any third-party governance and that we can really do without a bank to transfer money. What made this possible was the specific data structure called blockchain that distributes trust across many nodes. Each node stores the data about every transaction that has ever occured in the network. It uses the Proof-of-work algorithm that is quite secure and cant be hacked. Since then quite many more alternative cryptocurrencies have appeared, each of them adding something else on top of bitcoins technology extending its functionality. However, Ethereum remains one of the most popular cryptocurrencies (moved down from the 2nd to the 3rd place by Ripple recently) with very interesting potential. The difference between Ethereum andBitcoin Ethereum can also be exchanged without any governance, but its also got its own turing-complete programming language that allows you to build smart contracts. When you buy any coins in the bitcoin network, they are sent to a unique address. This address is used not for storing the coins, but as a unique identifier like a bank account number that calculates the total of all the transactions that pass through this address. The nearest analogy in the material world is the ledger that records all the deposits and withdrawals from the account. When a transaction occurs the old balance is reduced by some amount and an Continue reading >>

More in ethereum