Hello My Steemain Friends ,

Dear friends, I am @aviral123 from India. How are you all, I hope you all are well. I am fine too . Today I am sharing my post with you in this community. Today I will share with you "What Are Smart Contracts? and How do smart contracts work. I want to share my thoughts about this with you all. let's start

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Smart contract is a type of digital agreement on the blockchain network, under which we make transactions without any intermediary. It executes automatically when certain terms and conditions are met. It is signed and stored on the blockchain network. The terms and conditions are written in blockchain-specific programming languages.

The first person to propose smart contracts in 1994 was American-born computer scientist Nick Szabo who developed a virtual currency called "bit gold" in 1998. The practical use of smart contracts is made possible within the Ethereum blockchain platform.

Smart contracts serve to form the foundation of most blockchain use cases, from NFTs to apps and the metaverse. Since smart contracts are being used, a manufacturer in need of raw materials can set up payment. And the supplier can schedule the shipment. Thus, payment on delivery can be automatically transferred to the seller under the contract between the two organizations.

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Ethereum is currently considered to be one of the most prevalent platforms enabling smart contract implementation.

How do smart contracts work

It is important for us to understand how smart contracts work. It is a binding contract between two parties. Use this code to avail its benefits. Smart contract works in the following way:

Agreement

Parties wishing to exchange or trade products or services must agree to all terms and conditions of the contract. Those parties must also determine what the operating procedures of the smart contract will be and include the required parameters.

Monitoring conditions

A smart contract uses the blockchain or a separate trusted source to compute predetermined conditions. Like date received, payment made etc.

Contract manufacturing

Parties to a transaction can use a variety of methods to create a smart contract. The terms and provisions of the contract are coded in a programming language. In this process, full care is taken of the security of the contract.

Recording

All results related to contract execution are immediately published on the blockchain. Details of all types of transactions are stored in the blockchain. These documents are available all the time. It works like a transparent system, in which the transactors can easily see all the details of their transactions at any time.

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Conclusion

Thus we see that smart contracts have the potential to completely transform digital transactions. They maintain transparency between both parties. Smart contracts work under a decentralized and trustless network process, so it is essential for the code to be trusted. Security auditing is required in this contract.

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