What is a Smart Contract?

The use of smart contracts has made blockchain technology the tailor-made solution for finance, investment, health care, and whatnot! But, what does a smart contract mean? How does it work, and how to deploy it seamlessly?

What is a Smart Contract?

Various industries choose blockchain over other recent technologies of its era due to the trustless and decentralized environment offered by blockchain. When we talk about trustlessness, smart contracts play a critical role. The use of smart contracts has made blockchain technology the tailor-made solution for finance, investment, health care, and whatnot! But, what does a smart contract mean? How does it work, and how to deploy it seamlessly? This article will be an ideal guideline for anyone to get started with smart contracts.

What is a Smart Contract?

Literally, a contract means an agreement between two or more parties to arrive at a conclusion. Smart contracts are very similar to traditional contracts, but with the difference that smart contracts are executed as lines of code on the blockchain network. These are magical lines of code that automate tasks occurring on the blockchain network, be it lending, collection of funds, or distribution of staking rewards. Smart contracts fuel any kind of protocol-based event you see on DeFi platforms. In fact, what's happening in the background when you fetch your wallet's balance is done by smart contracts.

Like Bitcoin, smart contracts envision easy transactions across the globe but with enhanced reliability, security, and accessibility. Smart contracts offer sophisticated P2P functionalities, including but not limited to insurance, loans, games, and logistics. Smart contracts have become the ideal way of carrying out transactions or deals among disparate, anonymous parties. The conditions to be met are hard coded on the blockchain network, eliminating the need for a legal system or a centralized authority.

A Fact To Note: Smart contracts were first proposed in 1994 by Nick Szabo, an American computer scientist who invented a virtual currency called "Bit Gold" in 1998, fully ten years before the invention of bitcoin.

How Does a Smart Contract Work?

To be simple, smart contracts function pretty much similar to "if... then..." statements in conventional programming. When some conditions are met, something will occur as a consequence. The smart contracts are deployed on top of the distributed network. Every node in the network executes the actions when the predetermined conditions are met. These actions can be anything from making business transactions, issuing tickets, sending notifications, or registering a vehicle. When the transaction is complete, the blockchain is updated. The transaction details are appended as blocks in the blockchain, and no one could ever tamper with the data, ensuring trustlessness and security. To complete a task satisfactorily, smart contracts can contain as many stipulations as needed.

For example, say you put $1 in a candy vending machine and choose a candy bar worth $0.5. The code is written so that a candy pops out, and you get a balance of $0.5. Similarly, smart contracts can automatically automate any kind of exchange without any human intervention. Smart contracts help carry out a virtual transaction without an external enforcement mechanism. This helps automate a workflow when conditions in smart contracts are met.

How to Deploy Smart Contracts?

As experts are prophetic that blockchain will be the future of all finance and business, you must take your businesses on-chain. With the latest technology stacks, it is always complex to figure out how to get started. If you are looking to wet your feet with blockchain and you are not sure how to deploy smart contracts, Blockpulsar is the ideal solution. Blockpulsar makes smart contract development simple, flexible, and scalable by providing continuous integration and continuous deployment - CI/CD for smart contracts. Blockpulsar provides seamless abstraction layers for building and deploying smart contracts. You can focus on building actual smart-contract logic while we handle the rest.

For further reading see: How to Deploy Solana Program with Blockpulsar or Building and Deploying Solana Programs Using Github Actions & Blockpulsar.

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