Blockchain technology has continued to evolve over the years with new developments such as the smart contracts and even new versions of blockchain networks that target controversial environmental issues. In particular, smart contracts are simple programs that are stored in the blockchain and are used to exchange coins and mint NFTs among other functions according to specific criteria. The existence of smart contracts helps automate activities that would otherwise have to be done manually. Keep on reading to know more about smart contracts.
Smart contracts work just like traditional contracts. The only difference is that they are completely digital and of course, stored inside a blockchain. The fact that smart contracts are stored inside a blockchain gives them some really interesting properties too. The contracts do not require a middle man to regulate the terms between the parties who have signed them; instead, the contract terms and conditions will be automatically executed once they are met. Plus, smart contracts are also immutable and distributed which makes them really secure. What does that mean exactly? Once a smart contract is created, it can never be changed again. Being distributed means that the output of the programs is validated by everyone in the Network
Smart Contracts and Non-Fungible-Tokens (NFTs)
NFTs are unique and can only have one owner at a time. Smart contracts are used mint NFTs and assign unique identifiers that no other token can replicate. The contract stored in the blockchain contains information regarding the creator of the works, the number of copies or editions, the royalties, ownership history, and more, and when someone buys or sells an NFT, the code and instructions according to different standards such as ERC-721
The digital media files are not stored in the blockchain that much data on the blockchain is expensive and consumes a lot of electricity.; instead, the smart contract contains a link to the work they represent which can be accessed only by the owner. The IPFS (Interplanetary File System) is distributed node network (P2P) and a popular way to upload files that will be minted through a smart contract.
The self-executing program or contract acts according to the instructions of the buyer and according to instructions pre-established by the owner in order to fulfill the agreement between the two parties. Once implemented, the smart contract is updated and the code will become immutable as soon as it is logged on the blockchain. Since a smart contract’s code on a blockchain is public, any person who uses smart contracts and has the requisite coding skills can inspect the code and verify the authenticity of the smart contract.
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