Crypto Terms:
Letter S
Jun 19, 2023 |
updated Apr 02, 2024
What is Smart Contract?
Smart Contract Meaning:
Smart Contract -
a self-executing computer program used to verify transactions on the blockchain.
Let's find out Smart Contract meaning, definition in crypto, what is Smart Contract, and all other detailed facts.
A smart contract is a self-executing computer program used on blockchain networks to verify transaction agreements between buyers and sellers. The contract is then distributed throughout the entire blockchain network.
The code of the smart contract can only be executed when the conditions stated in the contract are met. This execution is irreversible, and it’s next to impossible to alter the smart contract.
Smart contracts allow for anonymous peer-to-peer transactions between two or more parties that may not find each other reliable. The use of smart contracts eliminates the requirement for third-party involvement during a transaction.
Using a smart contract is a lot like getting a drink from a coffee machine. You select the criteria or choose what drink you want, pay for it, and get a drink in an instant, rather than getting in touch with the distributor of the coffee machine to make a contract for a cup of cappuccino.
Neither you nor the hypothetical machine owner needs to know each other’s identity for the transaction to be deemed valid. The anonymity of smart contracts is particularly favored by proponents of decentralized systems and a free economy.
Smart contracts can also be used by businesses that employ private blockchain systems. A smart contract can act as a guarantee for both the customers and service providers that their assets will be protected if the deal falls out and the risk of financial loss is mitigated.
smart contract's<\/strong><\/a> code to identify bugs, errors, or security flaws, as well as <strong>possible fixes<\/strong>.<\/p>\n<p>Since most smart contracts handle large sums of money, the audits are essential, because a single error or vulnerability can result in significant losses. More specifically, the users and stakeholders of the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-decentralized-applications-dapps/">decentralized application<\/strong><\/a> in question can be <strong>at risk of losing all of their assets<\/strong>.<\/p>\n<p>Smart contract audits are pretty complex because smart contracts frequently interact with one another. For this reason, the system checks are frequently expanded to include additional smart contracts involved in <strong>other transactions<\/strong>, even the ones in which a certain smart contract is not directly involved.<\/p>\n<p>The recommendations of the auditors are announced to the project team <strong>ahead of time<\/strong>, and their responses are included in the final report. Teams are eager to obtain an audit in order to gain user confidence and improve the project's credibility because it is regarded as <strong>a symbol of authenticity and integrity<\/strong>. <\/p>\n<p>Typically, audits are carried out in phases:<\/p>\n<ul>\n<li>The auditors and the team agree on the specifications (purpose, architecture, design, etc.) and the scope of the audit.<\/li>\n<li>The auditors perform unit tests (testing individual functions) and integration tests (testing larger parts).<\/li>\n<li>The auditors <strong>check for contract vulnerabilities<\/strong> using analysis tools and automated bug detection.<\/li>\n<li>The auditors examine the code manually to determine the developer's intentions and interpret the findings in that context.<\/li>\n<li>The team's findings and solutions are documented in <strong>the report<\/strong>.<\/li>\n<\/ul>\n<p><em>Why are smart contract audits so important? <\/em>For instance, the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum chain split in 2016 was caused by a code vulnerability exploited by an attacker. The attacker was able to drain millions of dollars worth of ETH because of a <strong>simple bug<\/strong>. This eventually resulted in disagreements in the community and a <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-hard-fork-blockchain/">hard fork<\/strong><\/a> because they couldn’t decide whether to forcibly return the assets or not.<\/p>\n<p>In the booming <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-defi/">DeFi business, where <strong>bug-filled smart contracts are frequently rushed out to suit investor demand<\/strong>, smart contract audits are becoming extremely vital. Harvest, bZx, Yam Finance, <strong>Eminence<\/strong>, and Balancer are just a few of the million-dollar hacks that have occurred in 2020 because of various bugs in smart contracts.<\/p>","definition":"an in-depth investigation and analysis of the code of a smart contract to find issues, errors, and security flaws.","status":"published","updated_at":"2024-04-02T14:16:56.000000Z"}"
:prev-section="{"id":911,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Cardano_(blockchain_platform)","level":"medium","section":"S","keyword_en":"Slot (Cardano)","author_id":1,"created_at":"2023-06-19T06:59:01.000000Z","slug":"what-is-slot-cardano","title":"What is Slot (Cardano)?","keyword":"Slot (Cardano)","content":"<p>In the <strong>Cardano <\/strong>blockchain, a slot is the shortest time period (1 second). Each slot has a slot leader, who has the option of creating a single <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-block/">block for that slot. Though he can also choose not to create it. There are two outcomes if the slot leader doesn’t establish a block: <\/p>\n<ul>\n<li>The slot remains empty because no one creates blocks in it.<\/li>\n<li>The next slot leader will be selected from a different <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-staking-pool/">staking pool<\/strong><\/a> <em>(this wouldn’t be the case otherwise)<\/em>.<\/li>\n<\/ul>\n<p>The <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-proof-of-stake-pos/">Proof-of-Stake (PoS)<\/strong><\/a> protocol of Cardano is based on a system of slots and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-epoch/">epochs. Each epoch is made of slots that last 1 second. An <strong>epoch of Cardano<\/strong> typically has 432,000 slots which are equal to 5 days. <\/p>\n<p>Though in the Byron era there were 21,600 slots in each epoch and <strong>one slot leader per slot<\/strong>. The Byron era was the beginning of Cardano which is now replaced by Shelley's mainnet. The Shelley era has 20 times the number of slots in every epoch in comparison to the Byron era. However, in the Shelley era, <strong>only one out of five slots have a leader<\/strong>.<\/p>\n<p>Since there is no certainty that all slots will be filled with blocks, empty slots might appear. Empty slots can occur if no delegate wins the leadership for that slot and fails to construct a block within a certain time period. In addition, empty slots can appear <strong>as a result of network delay<\/strong> or the fact that network participants fail to notice winning blocks in a timely manner.<\/p>\n<p>In the Ouroboros Praos algorithm (which builds on prior protocols by the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-input-output-hong-kong-iohk/">IOHK team) each block is generated by a slot leader, who <strong>chooses a time slot<\/strong> in a random manner to produce a block. No two leaders can be active at the same time, and all blocks are built independently because of that.<\/p>\n<h3>What Is Cardano?<\/h3>\n<p>Cardano is a <strong>blockchain platform<\/strong> featuring the ADA governance token as its native token. Charles Hoskinson, a co-founder of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum, left the company in 2014 and founded Cardano. The developers of Cardano intended to establish a scalable and secure <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-cryptocurrency/">cryptocurrency with real-world applications.<\/p>\n<p>The usage of a unique layer architecture (Control Layer and Computation Layer) is a major innovation of Cardano. The Control Layer is similar to other blockchains in that it <strong>stores all of the data concerning transfers and account balances<\/strong>. The Computation Layer, on the other hand, operates <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">smart contracts<\/strong><\/a>, as well as handles financial computations for loans and insurance policies, and so on.<\/p>\n<p>Cardano's developers have <strong>great aspirations for the future<\/strong>. They want to make ADA a payment method that is accepted worldwide, and they're working with companies all across the world to achieve this goal. In addition, they intend to launch sidechains, which are independent blockchains that can interact with the main chain while being <strong>faster and more adaptable<\/strong>.<\/p>","definition":"Slot \u2013 the shortest time period in the Cardano blockchain.","status":"published","updated_at":"2024-04-02T14:16:57.000000Z"}"
:model="{"id":725,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Smart_Contract","level":"easy","section":"S","keyword_en":"Smart Contract","author_id":1,"created_at":"2023-06-19T06:59:00.000000Z","slug":"what-is-smart-contract","title":"What is Smart Contract?","keyword":"Smart Contract","content":"<p>A smart contract is a <strong>self-executing computer program used on<\/strong> <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-blockchain/">blockchain networks<\/strong><\/a> to verify transaction agreements between buyers and sellers. The contract is then distributed throughout the entire blockchain network. <\/p>\n<p>The code of the smart contract can only be executed when the conditions stated in the contract are met. This execution is irreversible, and <strong>it’s next to impossible to alter the smart contract<\/strong>.<\/p>\n<p>Smart contracts allow for <strong>anonymous<\/strong> <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-peer-to-peer-p2p/">peer-to-peer <strong>transactions<\/strong> between two or more parties that may not find each other reliable. The use of smart contracts eliminates the requirement for third-party involvement during a transaction.<\/p>\n<p>Using a smart contract is a lot like getting a drink from a coffee machine. You select the criteria or choose what drink you want, pay for it, and get a drink in an instant, rather than getting in touch with the distributor of the coffee machine to make a contract for a cup of cappuccino.<\/p>\n<p>Neither you nor the hypothetical machine owner needs to know each other’s identity for the transaction to be deemed valid. The anonymity of smart contracts is particularly favored by proponents of decentralized systems and a free economy.<\/p>\n<p>Smart contracts can also be used by <strong>businesses that employ private blockchain systems<\/strong>. A smart contract can act as a guarantee for both the customers and service providers that their assets will be protected if the deal falls out and the risk of financial loss is mitigated.<\/p>","definition":"a self-executing computer program used to verify transactions on the blockchain.","status":"published","updated_at":"2024-04-02T14:16:56.000000Z","author":{"id":1,"user_id":1,"image_id":2641,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-02-29T07:19:25.000000Z","title":"Editor-In-Chief","slug":"aaron-s-editor-in-chief","description":"<p>Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.<\/p>\n<p>With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","referral_token":"05TMu2NysXOCn525","referred_by":null,"last_connected_at":"2024-04-09T08:14:54.000000Z","created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-04-09T08:14:54.000000Z","full_name":"Aaron S."}}}"
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Matter","status":"published"},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published"}]},{"id":10,"is_updated":0,"image_url":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","image_url_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"created_at":"2024-03-29T15:17:14.000000Z","updated_at":"2024-03-29T15:17:14.000000Z","title":"Crypto Terms","crypto_book_sections":[]}]"
current-chapter="S"
current-section="what-is-smart-contract">
