What Is A Smart Contract And Why It Matters To You

Solen Feyissa

Web 3.0 is filled with jargon that is used frequently yet rarely defined. The purpose of this is to explain smart contracts in a simple and concise manner.

What is a Smart Contract

A smart contract is neither smart nor a contract. It is code that has conditions in place for automatic deployment and distribution. Smart contracts aim to be immutable, so changes can not be made once it’s deployed on the blockchain. It’s supposed to be trustless, which removes the human factor from the equation.

One of the best examples of a smart contract is thinking of it as a vending machine. The combination of the money you put in for the purchase and your selection of the offerings yields a snack. The vending machine is automated and is able to execute depending on what you want it to accomplish. You can do anything with a smart contract, there aren’t many limits.

Why This Matters

Understanding smart contracts is attractive to those that want to grasp the technology driving web 3.0 rhetoric as well as non-fungible tokens (NFTs). However, this is is still relevant to those that are not interested in NFTs as well.

Everything will have a digital token. Smart contracts will continue to evolve and empower the builders in this space. There is a power that comes from knowing that whatever you want to see happen, it can be done using a smart contract. This also means that threat actors have the same privileges and power, which can make this technology just as exploited as any other in the past if we allow it.

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