What are smart contracts?

What are Smart Contracts

Let’s understand what Smart Contracts are using a simple example. Consider the purchase of cookies from a vending machine. The one who wants to buy the cookie deposits the change into the machine and presses the button. The button when pressed activates a lever and throws out the cookie. The whole transaction took place without a cashier/clerk.

Smart contracts play the role of a vending machine. Smart Contract automatically eliminates the role of an intermediary. In the example taken above, the vending machine replaces the seller and allows the consumer to make a purchase. Thus, there is no middleman involved in this transaction.

Smart contracts are basically programs which eliminates the need of intermediary and runs on blockchain. Smart contracts are implemented as code associated with a blockchain account and can execute contracts with terms and conditions written into the agreement and agreed upon by both the parties. 

Smart contract runs on Ethereum blockchain’s platform. It eases the exchange of shares, property, money or any assets. Ethereum smart contracts can be written in two programming languages – Solidity and Serpent. Solidity is more widely adopted than Serpent and is a high-level programming language used for running

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