Podcast
Questions and Answers
What is the primary function of a smart contract?
What is the primary function of a smart contract?
- To digitize agreements and automatically execute terms when met (correct)
- To replace traditional lawyers and notaries
- To provide legal advice on contract disputes
- To create physical agreements between parties
Which of the following is a characteristic of smart contracts?
Which of the following is a characteristic of smart contracts?
- Automatic execution (correct)
- Manual review
- Private terms
- Guaranteed subjective outcomes
What is one potential application of smart contracts?
What is one potential application of smart contracts?
- Enforcing handwritten contracts
- Creating paper-based records
- Decentralized gaming (correct)
- Negotiating verbal agreements
Which of the following real-world examples closely resembles the functionality of a smart contract?
Which of the following real-world examples closely resembles the functionality of a smart contract?
What is a key advantage of smart contracts?
What is a key advantage of smart contracts?
Flashcards
Smart Contracts
Smart Contracts
Digital agreements that automatically execute when terms are met using computer code.
Smart Contract Characteristics
Smart Contract Characteristics
Execution is automatic, outcomes predictable, records public, privacy protected, and terms visible.
Digital Asset Creation
Digital Asset Creation
Digitally creating unique items
Automated Insurance Payouts
Automated Insurance Payouts
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Open Currency Exchange
Open Currency Exchange
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Study Notes
- Smart contracts
What is a Contract?
- Contracts are agreements.
- Any agreement can be encapsulated within a contract.
- Verbal or paper contracts have flaws but are acceptable.
What are Smart Contracts?
- Smart contracts digitize agreements.
- Terms are turned into computer code.
- Code automatically executes when terms are met.
- Smart contracts are building bocks for Ethereum applications.
- Computer programs are stored on the blockchain.
- Traditional contracts are converted into digital parallels.
- Structure follows if this, then that logic.
- Can not be changed and behave exactly as programmed.
How it Works
- There is a preprogrammed contract.
- Then a chain of events.
- Execution results in value transfer.
- Settlement occurs.
Characteristics
- Contracts are executed automatically.
- Outcomes are predictable.
- Public record is created.
- Privacy protection is enabled.
- Terms are visible.
Examples
- Smart contracts act as if this happens, then that.
- Insurance policies pay out automatically.
- Smart contracts can enable decentralized gaming.
- Can be designed to deliver compensation when project requirements are fulfilled.
- Digital vending machines only dispense product if all requirements are met.
Use Cases
- Use cases include creating and distributing unique digital assets.
- Smart contracts enable automatic, open currency exchange.
- Supports decentralized gaming.
- Insurance policies pay out automatically when triggered.
- Creates a standard that lets people create customized, interoperable currencies.
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Description
Smart contracts digitize agreements by turning terms into computer code that automatically executes when conditions are met. Built on blockchain technology, these contracts ensure predictable outcomes, create public records, and protect privacy. They function based on 'if this, then that' logic, offering a reliable way to transfer value and settle agreements.
