What is a Smart Contract

In this video by Whiteboard Crypto, you’ll be introduced to the smart contract concept.

Bitcoin has revolutionized the distributed ledger system that securely processes sent and received money to the blockchain. But, Bitcoin is only used for money exchange. With the programmability capability of Ethereum, it was possible to create applications other than only money exchange. Ethereum can compute with EVM and all transactions can be processed on the blockchain network. Each of these programs is called a ‘smart contract’.

Smart contracts are computer programs that can carry out transactions and agreements between anonymous parties in a reliable and consistent manner. The parties agree that a piece of code will be executed when certain conditions are met.

Smart contracts can be produced not only on EVM-compatible blockchains but also on non-EVM blockchains with different processes.

Some use cases mentioned in the video for smart contracts are as follows:

1. Flash Loans
2. Insurance
3. Token Switching (Decentralized Exchanges)
4. Buying and Selling real world representation