Smart Contracts Quiz
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Questions and Answers

How are smart contracts defined?

  • Programs stored on a blockchain that run when predetermined conditions are met (correct)
  • Programs stored on a cloud server that run when predetermined conditions are met
  • Programs stored on a website that run when predetermined conditions are met
  • Manual contracts signed in person

    • What triggers the execution of smart contracts?

  • Random selection
  • Government approval
  • Predetermined conditions being met (correct)
  • Intermediary involvement

    • How do smart contracts work?

  • By random decision making
  • By following instructions from a centralized authority
  • By following simple 'if/when...then...' statements written into code on a blockchain (correct)
  • By following a complex algorithm only understandable by experts

    • What happens when a smart contract's actions are executed?

    <p>The blockchain is updated to reflect the completed transaction</p> Signup and view all the answers

    What is essential for participants to establish within a smart contract?

    <p>The 'if/when...then...' rules that govern transactions and possible exceptions</p> Signup and view all the answers

    What happens to the transaction data within a smart contract?

    <p>It is represented and stored on the blockchain</p> Signup and view all the answers

    What is one of the benefits of smart contracts?

    <p>Speed, efficiency, and accuracy</p> Signup and view all the answers

    How are blockchain transaction records secured?

    <p>By linking each record to the previous and subsequent records on a distributed ledger</p> Signup and view all the answers

    What is a key advantage of smart contracts in international trade?

    <p>Reduction of friction and risk</p> Signup and view all the answers

    How do organizations simplify structuring smart contracts for business purposes?

    <p>By providing templates, web interfaces, and online tools</p> Signup and view all the answers

    What is the main purpose of the Pharma Portal blockchain-based platform?

    <p>Tracking temperature-controlled pharmaceuticals through the supply chain</p> Signup and view all the answers

    How does The Home Depot use smart contracts on blockchain?

    <p>To quickly resolve disputes with vendors and build stronger relationships</p> Signup and view all the answers

    What is the unique characteristic of blockchain transaction records that makes them hard to hack?

    <p>Being linked to the previous and subsequent records on a distributed ledger</p> Signup and view all the answers

    What is a notable advantage of smart contracts in reducing time delays and fees?

    <p>Removing the need for intermediaries to handle transactions</p> Signup and view all the answers

    Why do organizations utilize templates, web interfaces, and other online tools for structuring smart contracts?

    <p>To simplify structuring smart contracts for business purposes</p> Signup and view all the answers

    What is one of the main features that makes smart contracts execute immediately?

    <p>Digital and automated nature of smart contracts</p> Signup and view all the answers

    What is the primary function of smart contracts?

    <p>Automating the execution of agreements and workflows on a blockchain without the need for intermediaries</p> Signup and view all the answers

    How do smart contracts function based on their code on a blockchain?

    <p>They follow 'if/when...then...' statements to execute predefined actions when conditions are met and verified</p> Signup and view all the answers

    What is a key characteristic of smart contracts' interactions with blockchain transactions?

    <p>They ensure that transaction data is immutable and cannot be altered after execution</p> Signup and view all the answers

    What is a crucial step for participants in establishing the terms of a smart contract?

    <p>Determining how transactions and their data are represented on the blockchain</p> Signup and view all the answers

    What is the role of a network of computers in executing actions within a smart contract?

    <p>Verifying and executing actions when predetermined conditions are met</p> Signup and view all the answers

    What is the primary purpose of automating the execution of agreements using smart contracts?

    <p>To provide immediate certainty of outcomes without intermediary involvement or time loss</p> Signup and view all the answers

    What is a potential benefit of using smart contracts in international trade?

    <p>Reduced need for intermediaries</p> Signup and view all the answers

    How do blockchain transaction records contribute to security?

    <p>They are encrypted and connected on a distributed ledger</p> Signup and view all the answers

    What distinguishes smart contracts from traditional paper-based contracts?

    <p>They are digital, automated, and execute immediately</p> Signup and view all the answers

    What is a key feature of the IBM Blockchain Transparent Supply Pharma Portal platform?

    <p>Reliable and accurate data sharing</p> Signup and view all the answers

    How do organizations simplify the structuring of smart contracts for business purposes?

    <p>By providing tools like templates and web interfaces</p> Signup and view all the answers

    What contributes to the immediate execution of smart contracts?

    <p>Digital and automated nature of smart contracts</p> Signup and view all the answers

    What is one of the primary benefits of using we.trade for businesses involved in global trade?

    <p>Reduced time delays and fees in global trade</p> Signup and view all the answers

    How does The Home Depot use smart contracts on blockchain to strengthen retailer-supplier relationships?

    <p>By creating more time for critical work and innovation</p> Signup and view all the answers

    What is a notable characteristic of blockchain transaction records that contributes to their security?

    <p>Their encryption and connection on a distributed ledger</p> Signup and view all the answers

    What is an essential aspect of smart contracts that contributes to trust and transparency in transactions?

    <p>Absence of third-party involvement in transactions</p> Signup and view all the answers

    Study Notes

    Defining Smart Contracts

    • Smart contracts are self-executing contracts with the terms of the agreement written directly into lines of code.

    Execution of Smart Contracts

    • The execution of smart contracts is triggered by specific conditions or events.
    • Smart contracts work by automating the execution of agreements when conditions are met.
    • When a smart contract's actions are executed, the transaction data is recorded on a blockchain.

    Characteristics of Smart Contracts

    • Essential for participants to establish clear and specific terms within a smart contract.
    • Transaction data within a smart contract is immutable and secure.
    • One of the benefits of smart contracts is increased efficiency and speed.
    • Blockchain transaction records are secured through cryptographic algorithms.

    Applications of Smart Contracts

    • In international trade, smart contracts provide a key advantage in reducing time delays and fees.
    • Organizations simplify structuring smart contracts for business purposes using templates, web interfaces, and other online tools.
    • The primary function of smart contracts is to automate the execution of agreements.
    • Smart contracts function based on their code on a blockchain, ensuring transparency and trust.

    Case Studies

    • The Pharma Portal blockchain-based platform uses smart contracts to increase efficiency in the pharmaceutical supply chain.
    • The Home Depot uses smart contracts on blockchain to strengthen retailer-supplier relationships.

    Benefits of Smart Contracts

    • A unique characteristic of blockchain transaction records is that they are hard to hack due to their decentralized nature.
    • One of the primary benefits of using smart contracts is increased trust and transparency in transactions.
    • Smart contracts execute immediately due to their automated nature.
    • A potential benefit of using smart contracts in international trade is increased speed and efficiency.

    Security of Blockchain Transaction Records

    • Blockchain transaction records contribute to security through their decentralized and immutable nature.
    • A crucial step for participants in establishing the terms of a smart contract is to ensure clear and specific conditions.

    Key Features of Smart Contracts

    • A key feature of smart contracts is their ability to execute immediately and automatically.
    • Smart contracts interact with blockchain transactions through their code, ensuring transparency and trust.
    • A key characteristic of smart contracts' interactions with blockchain transactions is their automated nature.

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    Description

    Test your knowledge about smart contracts, which are programs stored on a blockchain that automate the execution of agreements or workflows based on predetermined conditions. Learn how they work and their impact on eliminating intermediaries.

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