What is the Core Purpose of Smart Contracts?
Have you ever played on an online slot machine? If you have, or maybe just have seen it, then you’re probably quite familiar with the premise of how it works - you wager some money, and press the button to play. If the outcome of the images that appear on the screen is in your favor, you will be paid out your winnings right after.
In other words, once you initiate the slot machine, the process happens automatically, and depending on the outcome, rewards are paid out automatically, as well. This is actually exactly how smart contracts function, as well.
In this section, we’re covering smart contracts. Specifically, what smart contracts are, how they work, and what they are used for.
Let’s get right to it!
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What is a Smart Contract? (Explained with Animations)
What are Smart Contracts?
Officially, Smart Contracts in crypto are a set of pre-coded rules that will initiate some actions on the blockchain without interventions from a third party. You can call it a program, or simply, a blockchain app, with its own sense of how things should work in one situation, or another. Smart contracts are built by developers and launched on blockchains to bring some logic into people's actions. Let’s just say, it makes blockchains work smarter, and in accordance to set conditions.
So - what are smart contracts in human-speak, exactly?
Well, as the name implies, they are contractual obligations for something to happen. In other words, if you make an agreement with your friend that you’ll mow their lawn if they help you with your math homework, this can be considered a contract.
Obviously, the “smart” part in the term “smart contract” is the important bit. To put it simply, it signifies that the contract will be executed automatically, without human intervention, and that once it’s set, it cannot be altered.
A close example of this idea is if you’d decide to take out a loan. You would have to settle the details with your bank, and sign a contract. Once all of the details are settled, your bank would pay out the money into your bank account.
In this situation, though, the process is performed by a human - someone checks your information, and pays out your loan, or maybe not! With a smart contract, there would be no middleman - your information would be verified automatically, according to some set criteria, and the money would be paid out without human intervention, as well.
This is one of the core purposes that smart contracts serve, in the first place - they allow for certain processes to happen automatically, without the need for a human being to intervene. Think of a coffee machine - instead of boiling the water in a kettle, adding coffee to a mug, and then filling the mug with hot water, all that you need to do is push a button on the coffee machine, and wait - the process happens automatically! And YES, now you can call your coffee machine a smart one. Smart, because it works based on some initially programmed logic with no need for third parties to be involved. The absolute same can be said about Smart Contracts.
It’s convenient, fast, and effective. However, what if you decide that you actually want tea instead of coffee, midway through the machine making your drink? You could probably just press one button, and cancel the process!
Well, this is an opposite core feature of smart contracts - once they’re in action, there’s no going back. No matter what happens, a smart contract will be executed, once it’s started.
While this does sound a bit intimidating, I assure you - this is a good thing!
The strict nature of smart contract execution means that users won’t be tricked, once the contract is in motion. Let’s go back to the coffee machine example. Imagine that you really want a cup of coffee - you set the machine to start making your favorite latte, and then go to do something else while it does the deed. However, some guy walks past the machine, notices that you’re making coffee for yourself, and decides to press the “STOP” button, simply to pull a prank on you.
You come back, and the machine is turned off, with no coffee to be made - that’s frustrating!
Now, sure - this is nothing more than a minor inconvenience. However, since smart contracts usually involve money (and lots of it!), the risks would be far more dire and noteworthy.
In other words, malicious individuals would be able to scam investors out of their funds by promising something great and then simply running away with the money. Smart contracts help potential investors avoid this by checking out the details behind them, and providing the guarantees that, once initiated, the contracts won’t be altered.
How? Unlike coffee machine logic, smart contracts are public, so anyone can check and see what exact logic is set, and when and how it will proceed after you perform one action or another. And this is definitely a transparency question! If some blockchain activities involve hundreds or thousands of people, the community will always check what will happen according to the smart contract initiated for those activities.
How Do Smart Contracts Work?
Let’s look into how smart contracts work, exactly.
The vast majority of smart contracts are built (and issued) on the smart network - specifically, the Ethereum network. And this is the key difference between Ethereum-based blockchains and Bitcoins’.
Ethereum is a “smart” crypto-powered network - a decentralized (no single authority-possessing) global node of computers, if you will. On it, people are able to create various applications, including smart contracts. Bitcoins’ blockchain network, is, let’s call it - the dumb one, because of its lack of smart functionality. So, no smart contracts on a Bitcoin network.
Namely, on Ethereum, smart contracts are built with the help of Solidity - a programming language that was specifically designed for developers working with the Ethereum network. These developers receive the criteria for a smart contract (for example, “if Sam pays me $10, I will send Sam the article”), and then create it by using Solidity. Essentially, a smart contract is basically an “IF something happens, THEN do this” function.
When a smart contract is created, it needs to be deployed on the network. Once that happens, the contract becomes active, and the terms of the contract can be executed.
As I’ve mentioned earlier, smart contracts work in an automatic manner. This means that, once they’re deployed, developers won’t need to add or change anything else - if the terms of the contract are met, it will perform its intended function.
Furthermore, I would like to reiterate the fact that smart contracts are immutable - in other words, they can't be changed. This makes them secure and reliable, as long as the conditions by which they were deployed were checked and verified to be fair.
That said, you might be wondering - WHY can’t smart contracts be tampered with? Specifically, how is this ensured?
Well, this is thanks to blockchain technology. I won’t go too in-depth with the technical stuff on how that works, since it’s an entire section of its own, but in essence, in order to change the terms of a smart contract once it’s deployed, you’d need to be in command of at least 51% of the blockchain that the contract is based on - this is practically impossible.
And also if you’d like to find out more about how blockchains work, make sure to check out the section on the topic.
What Can Smart Contracts Be Used for?
So - thus far, we’ve covered what smart contracts are, and also how they perform the processes that they do. As a final point, let’s take a look at some examples of what these pieces of technology can be used for.
For starters, let’s say that you’re a farmer who wants to insure their crops, in case there’s a drought this year. The insurance company uses a smart contract for your insurance, with these terms:
“If the air temperature between the months A and B is above 90 degrees Fahrenheit for at least C amount of days, consecutively, pay out the farmer X amount of money.”
The insurance company would then make the smart contract track the local weather news platforms that have high reliability. Thus, the entire process would be automatized - if there was a drought that year, you would automatically receive your insurance payout!
And what's most important is that nobody ever will change the rules you, as the farmer, agreed to.
Here’s another example - imagine that you want to receive a yearly bonus in your job, and are trying to negotiate it with your boss. Your boss lays down the requirements that you need to meet in order to receive that bonus and gives you a deadline. He also creates a smart contract that states:
“If A performs B, C, and D tasks until December 31st, 2022, A receives a bonus of X amount of money.”
In a situation like this, you know that you will DEFINITELY receive the bonus, if you meet all of the requirements by the end of the year - after all, once the smart contract is created, there’s no turning back! And your crazy boss will never change his opinion just because of bad weather!
These are just a couple of examples that illustrate the potential of smart contract technology. Truth be told, the opportunities for smart contract application are vast - this technology can be incorporated into a huge variety of different areas, and, frankly, smart contracts are making their way into the mainstream, as we speak!
So, in this section, we’ve covered all of the essential information that you need to know about smart contracts - what they are, how they work, and the variety of different ways of how we can use them. If you would like to learn about various crypto topics - check out our section about NFTs.
Web 1.0<\/h3>\n<p>Web 1.0 can be viewed as the very beginning of the internet. It’s kind of mutually agreed upon that this version of the web lasted <strong>from the 1980s, up to the early 2000s<\/strong>. The defining characteristic of this form of the web is the fact that users were only able to view the information online, without really being able to customize their experience while doing so. Let’s call it - <strong>“The Read Only”<\/strong> Internet, where users were <strong>CONSUMERS<\/strong> of the data.<\/p>\n<p>In general, even this was a completely new concept. People would be used to accessing all of their information in newspapers and books - Web 1.0 basically digitalized this experience.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: Web 1.0.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bc82968d0.o.jpg/" alt=\"What is Web 3.0: Web 1.0.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Specifically, you could visit static web pages, and read up on topics that interested you. In most cases, you couldn’t create personal profiles, and <strong>your whole browsing experience would be directed around accessing the information that you’re searching for<\/strong>. In other words, there was nothing “personal” about this form of the internet - it purely revolved around consuming the information.<\/p>\n<p>Being a completely new concept, naturally, Web 1.0 had a lot of obvious downsides. One of them, as I just mentioned - <strong>lack of personalization<\/strong>. However, this version of the internet experience was also very <strong>slow<\/strong>, and users would have to possess a lot of patience in order to receive or send a piece of information.<\/p>\n<h3>Web 2.0<\/h3>\n<p>With time, as the internet became more and more popular, it started expanding in functionality, too. <strong>The rise of social media platforms and data collection channels marked the beginning of what we now call Web 2.0<\/strong> - in other words, the current version of the internet that we all know and use.<\/p>\n<p>If you were to ask what defines this version of the web? The answer would be - you.<\/p>\n<p>Web 2.0 brought the ability to <strong>INTERACT<\/strong>, not just to consume. Like to create social profiles, identify yourself to large tech companies, and thus, customize your experience on the internet. The web became much more personal, with your browsing experiences tailored to your personal preferences, wants, and needs. <strong>User connections and social participation became the key factors of this form of the internet<\/strong>. <\/p>\n<p>The whole idea and purpose of the internet was changed. Web 2.0 is more about showing yourself by sending or receiving data instantly via live streams, video sharing, or instant messaging. The content type was transformed from <strong>static to dynamic<\/strong>. Data became instantly accessible.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: It started expanding in functionality.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bcc5539cf.o.jpg/" alt=\"What is Web 3.0: It started expanding in functionality.\" width=\"1000\" height=\"550\" \/><\/p>\n<p><strong>Facebook and Google<\/strong> are the usual examples when it comes to the earlier-mentioned companies. These two brands are <strong>data collection and personalization GIANTS<\/strong> - it has come to a point where you could say that they know what you like and dislike better than you do, yourself!<\/p>\n<p>The platforms collect and analyze your information, and then sell it off to third-party advertisers so that they could do a better job at targeting their ads at you. These processes have become so advanced that you might simply think about wanting to purchase a plush teddy bear, and start seeing ads for your local toy store the next day!<\/p>\n<p>Now, naturally, there’s no “black magic” involved. However, such joke-examples just go to show <strong>how much personal info we give up, and how far the aforementioned processes have come over the years<\/strong>.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: Personal preferences, wants, and needs.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bd969fd21.o.jpg/" alt=\"What is Web 3.0: Personal preferences, wants, and needs.\" width=\"1000\" height=\"550\" \/><\/p>\n<p>As you can probably imagine, the biggest concern for Web 2.0 is user data privacy. While we do actively choose to give up our personal information to these large data aggregation platforms, it has come to the point where people have started to search for <strong>alternative ways to use the internet<\/strong> - ways that wouldn’t involve <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-centralized/">centralized institutions controlling everything that we see online.<\/p>\n<p>This is where the concept of Web 2.0 VS Web 3.0 comes in.<\/p>\n<h3>Web 3.0<\/h3>\n<p>The simplest definition of Web 3.0 is a “<strong>decentralized internet<\/strong>”. It’s a form of the web that would allow users to frankly remain <strong>anonymous<\/strong> while using it, and only share data that they themselves feel comfortable with sharing. That said, this form of the internet would also be much faster, and utilize data analysis. <strong>The Internet will become smarter because of quantum-computers and self-learning algorithms or AI<\/strong>.<\/p>\n<p>The experience of the Web 3.0 internet will also change. We will start hearing more about the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-metaverse/">Metaverse, <strong>Virtual or Augmented Realities as a data medium<\/strong>. Data types will go from purely dynamic to live data, and, in most cases, will change and be produced instantly, on the go.<\/p>\n<p>Web 3.0 wouldn’t be controlled by any of the earlier-mentioned centralized institutions. Instead, it would be completely decentralized - meaning, <strong>lacking any central companies or brands that would dominate the space<\/strong>. So, no presidents or CEOs!<\/p>\n<p>How is this possible? Well, currently, Web 3.0 is explored through the lens of crypto technology. <strong>For example,<\/strong> <strong>Bloomberg has also described Web3 as a concept that “would build financial assets, in the form of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-token/">tokens, into the inner workings of almost anything you do online”.<\/strong><\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: Web 2.0 vs Web 3.0.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bebe3aa25.o.jpg/" alt=\"What is Web 3.0: Web 2.0 vs Web 3.0.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Let’s get something straight - cryptocurrencies aren’t necessarily associated with Web 3.0, at least inherently. It’s perfectly possible to create a decentralized version of the internet without any of the currently-existing crypto assets. That being the case, though, cryptocurrencies and the technology behind them help to conceptualize this goal much easier.<\/p>\n<p>Now, cryptocurrencies are built on blockchains - let’s call them, special databases that are mostly decentralized. In order to earn cryptocurrencies, oftentimes, you have to participate in a process known as “<strong>mining<\/strong>” - basically, you need to plug your computer into the network, and dedicate its resources for calculations, to help confirm the transactions happening on the said cryptocurrency's blockchain.<\/p>\n<p><strong>This way, you become an active participant in the network and help keep it decentralized.<\/strong><\/p>\n<p>Lastly, in order to send and receive cryptocurrencies, you need a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//best-cryptocurrency-wallet/">wallet - an app where your crypto assets are able to be kept safe and sound. Each wallet has two codes - <strong><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-public-address/">a public address<\/a><\/strong>, and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-private-key-secret-key/">a private key<\/strong><\/a>. The former is used for transacting with cryptocurrencies, while the latter is your secret key that is used to access the wallet, in the first place! <\/p>\n<p>I promised not to get too much into tech difficulties, so I’ll stop here. But why do I tell you all of this? <\/p>\n<p>Simply because all of these terms and concepts are <strong>relevant to Web 3.0<\/strong>!<\/p>\n<p>Within Web 3.0, individuals would probably use their cryptocurrency wallets in place of social profiles. These wallets would be used to verify your profile, and log onto certain websites, as well as to confirm actions that you’d perform on the internet - liking your friend’s profile picture, purchasing a digital drawing, or participating at a pop star gig in a Metaverse. Blockchain technology would help to perform all of these processes anonymously.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: User data privacy.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bf5ff2b4e.o.jpg/" alt=\"What is Web 3.0: User data privacy.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Now, naturally, as you can probably imagine, a decentralized version of the internet would bring with itself a lot of trouble, among other things. One of the benefits of our current version of the web is the fact that <strong>there’s strict moderation involved, and illegal content is quickly removed from the mainstream websites<\/strong>.<\/p>\n<p>Who would moderate such websites if the web would be lacking any central authority? This is where the concept of “<a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-the-dao/">DAOs” comes in.<\/p>\n<p>A “DAO” is a “Decentralized Autonomous Organization”. The term sounds very fancy, but the idea itself is actually rather simple to understand, fundamentally.<\/p>\n<p>Imagine that, in Web 3.0, each website would have <strong>a dedicated cryptocurrency of its own<\/strong> (these would be known as Web 3.0 coins). If you would own some of that cryptocurrency, you could participate in the decision-making processes of that website - what content to leave up and what to remove, what should be the color scheme of the site, should there be a paywall for users to be able to join, and so on.<\/p>\n<p>Together with other holders of said cryptocurrency, you would be able to <strong>vote<\/strong> on the important questions relating to that website. This would form the aforementioned DAO - <strong>a decentralized organization that makes the core decisions behind how a website functions.<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><img title=\"What is Web 3.0: DAO.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bf9599cbd.o.jpg/" alt=\"What is Web 3.0: DAO.\" width=\"1000\" height=\"600\" \/><\/strong><\/p>\n<p>Before we continue, let’s have a quick overview of what we’ve already discussed, up to this point.<\/p>\n<p>Web 3.0 is a decentralized version of the internet. <strong>It’s a conceptualized follow-up of Web 2.0<\/strong>, the current form of internet that you and I are familiar with. Web 3.0 aims to tackle things such as data privacy, large corporate entities controlling what we see on the internet, and, most importantly, user privacy. Also, it will bring us to the new mediums of data experience with Meataverses, VRs, and instant data aggregation. <\/p>\n<p>While Web 3.0 does not require cryptocurrencies to function, theoretically, the concept itself is much easier to understand when you learn how blockchains and crypto wallets work. This allows you to imagine <strong>how cryptocurrency wallets could replace online profiles, and how DAOs could be the answer to keeping things civil and legal<\/strong>.<\/p>\n<p>One more thing that you need to be aware of is something known as “<strong>the Web 3.0 Foundation<\/strong>”. Admittedly, it sounds like the core organization behind Web 3.0, right?<\/p>\n<p>Well, it’s not, really. The Web 3.0 Foundation is a group that aims to “support different projects that want to increase decentralization on the internet”.<\/p>\n<p>A noble mission - indeed! However, the organization is often criticized for being rather biased. For example, it offers grants to developers, but only those who would use the popular cryptocurrency <strong>Polkadot’s blockchain<\/strong> to create their projects. The entirety of the foundation itself is centered around said blockchain, so you can see why there are people who aren’t too excited about this organization.<\/p>\n<p>This leads me to my final point and something that I want to leave you off with. As I’ve hinted at throughout the entirety of this section, as of now, <strong>Web 3.0 is still just a rough idea, and a concept<\/strong>. Meaning, while there are theories of what this version of the internet should look like, and ideas of how it can be developed, it’s still very much <strong>in its infancy stage<\/strong>!<\/p>\n<p>Following that, many companies and organizations may try to capitalize on this, and influence how people view the concept, in the first place. Do not fall for it! While the idea of a decentralized web is very exciting, there are still many, many questions that need to be answered, and problems that need to be tackled until this concept becomes even remotely viable. <strong>Such as, what will happen if the biggest part of DAO’s votes will be concentrated in one person’s hands?<\/strong> <strong>Do we get back to the centralized internet? How to avoid that?<\/strong><\/p>\n<p>And so, that’s it! If you would like to learn more about the world of crypto, check out the section - \"<a href=https://www.bitdegree.org/"//crypto//learn//what-are-nfts/">What are NFTs?<\/strong><\/a>\"<\/p>","definition":"Did you know that Dr. Gavin Wood invented Web 3.0?","status":"published","meta_title":"What is Web 3.0: A New Concept of the Internet","meta_description":"Find out what is Web 3.0 & how it is different from Web 1.0 & Web 2.0. What are the advantages & disadvantages of a decentralized internet?","meta_keywords":"web 3.0 definition \/ what does 3.0 mean, web3 foundation, the new internet \/ internet 3.0, web 3.0 crypto, web3 wallet, web 3.0 examples, what is a component of web 3.0 that describes things in a way that computers can understand?, web2 vs web3 \/ web 2.0 vs web 3.0","modified_content":"<p>Everywhere you look online, it seems like the term “<a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-web-3-0/">Web 3.0<\/strong><\/a>” keeps popping up, in one context or another. It has come to a point where even my friends, who otherwise have nothing to do with crypto, are asking me - <strong>what in the world is this “Web 3.0” that we keep hearing about?<\/strong><\/p>\n<p>I have to admit - it’s not a simple question to answer! There’s no one, set definition for the term, and experts seem to use advanced tech-speak and complicated terminology when defining the concept. Well, I’m up to the challenge - we’ll try to discuss the topic in an easy-to-understand manner.<\/p>\n<p>We’ll be focusing on Web 3.0. Specifically, I’ll be answering questions such as <strong>what Web 3.0 is, how it works, and how Web 1.0 & Web 2.0 are different from Web 3.0.<\/strong><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is Web3? (Animated Explanation + Examples)\"\n title=\"What is Web3? (Animated Explanation + Examples)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Web 3.0: The Future of the Internet<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Web 3.0: The Future of the Internet\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"X_ushcDQZ5U\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">What is Web3? (Animated Explanation + Examples)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-web3-animated-explanation-examples.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-web3-animated-explanation-examples.jpg?tr=w-760 1000w\"\n alt=\"What is Web3? (Animated Explanation + Examples)\"\n title=\"What is Web3? (Animated Explanation + Examples)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is Web3? (Animated Explanation + Examples)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What is Web3?<\/h2>\n<p>According to the fancy definition:<\/p>\n<p>Web3 is an idea for a new iteration of <strong>the World Wide Web-based on blockchains<\/strong>, which incorporates concepts including decentralization and token-based economics.<\/p>\n<p>But what does Web3 actually mean?<\/p>\n<p><img title=\"What is Web 3.0: What is Web 3.0?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bc5733ae9.o.jpg/" alt=\"What is Web 3.0: What is Web 3.0?\" width=\"1000\" height=\"600\" \/><\/p>\n<p>As with most seemingly-complex topics, in order to understand Web 3.0 - also known as “the new internet” -, we should probably first explore the earlier iterations of the concept - namely, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-web-1-0/">Web 1.0<\/strong><\/a>, and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-web-2-0/">2.0./nWeb 1.0<\/h3>\n<p>Web 1.0 can be viewed as the very beginning of the internet. It’s kind of mutually agreed upon that this version of the web lasted <strong>from the 1980s, up to the early 2000s<\/strong>. The defining characteristic of this form of the web is the fact that users were only able to view the information online, without really being able to customize their experience while doing so. Let’s call it - <strong>“The Read Only”<\/strong> Internet, where users were <strong>CONSUMERS<\/strong> of the data.<\/p>\n<p>In general, even this was a completely new concept. People would be used to accessing all of their information in newspapers and books - Web 1.0 basically digitalized this experience.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: Web 1.0.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bc82968d0.o.jpg/" alt=\"What is Web 3.0: Web 1.0.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Specifically, you could visit static web pages, and read up on topics that interested you. In most cases, you couldn’t create personal profiles, and <strong>your whole browsing experience would be directed around accessing the information that you’re searching for<\/strong>. In other words, there was nothing “personal” about this form of the internet - it purely revolved around consuming the information.<\/p>\n<p>Being a completely new concept, naturally, Web 1.0 had a lot of obvious downsides. One of them, as I just mentioned - <strong>lack of personalization<\/strong>. However, this version of the internet experience was also very <strong>slow<\/strong>, and users would have to possess a lot of patience in order to receive or send a piece of information.<\/p>\n<h3>Web 2.0<\/h3>\n<p>With time, as the internet became more and more popular, it started expanding in functionality, too. <strong>The rise of social media platforms and data collection channels marked the beginning of what we now call Web 2.0<\/strong> - in other words, the current version of the internet that we all know and use.<\/p>\n<p>If you were to ask what defines this version of the web? The answer would be - you.<\/p>\n<p>Web 2.0 brought the ability to <strong>INTERACT<\/strong>, not just to consume. Like to create social profiles, identify yourself to large tech companies, and thus, customize your experience on the internet. The web became much more personal, with your browsing experiences tailored to your personal preferences, wants, and needs. <strong>User connections and social participation became the key factors of this form of the internet<\/strong>. <\/p>\n<p>The whole idea and purpose of the internet was changed. Web 2.0 is more about showing yourself by sending or receiving data instantly via live streams, video sharing, or instant messaging. The content type was transformed from <strong>static to dynamic<\/strong>. Data became instantly accessible.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: It started expanding in functionality.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bcc5539cf.o.jpg/" alt=\"What is Web 3.0: It started expanding in functionality.\" width=\"1000\" height=\"550\" \/><\/p>\n<p><strong>Facebook and Google<\/strong> are the usual examples when it comes to the earlier-mentioned companies. These two brands are <strong>data collection and personalization GIANTS<\/strong> - it has come to a point where you could say that they know what you like and dislike better than you do, yourself!<\/p>\n<p>The platforms collect and analyze your information, and then sell it off to third-party advertisers so that they could do a better job at targeting their ads at you. These processes have become so advanced that you might simply think about wanting to purchase a plush teddy bear, and start seeing ads for your local toy store the next day!<\/p>\n<p>Now, naturally, there’s no “black magic” involved. However, such joke-examples just go to show <strong>how much personal info we give up, and how far the aforementioned processes have come over the years<\/strong>.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: Personal preferences, wants, and needs.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bd969fd21.o.jpg/" alt=\"What is Web 3.0: Personal preferences, wants, and needs.\" width=\"1000\" height=\"550\" \/><\/p>\n<p>As you can probably imagine, the biggest concern for Web 2.0 is user data privacy. While we do actively choose to give up our personal information to these large data aggregation platforms, it has come to the point where people have started to search for <strong>alternative ways to use the internet<\/strong> - ways that wouldn’t involve <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-centralized/">centralized institutions controlling everything that we see online.<\/p>\n<p>This is where the concept of Web 2.0 VS Web 3.0 comes in.<\/p>\n<h3>Web 3.0<\/h3>\n<p>The simplest definition of Web 3.0 is a “<strong>decentralized internet<\/strong>”. It’s a form of the web that would allow users to frankly remain <strong>anonymous<\/strong> while using it, and only share data that they themselves feel comfortable with sharing. That said, this form of the internet would also be much faster, and utilize data analysis. <strong>The Internet will become smarter because of quantum-computers and self-learning algorithms or AI<\/strong>.<\/p>\n<p>The experience of the Web 3.0 internet will also change. We will start hearing more about the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-metaverse/">Metaverse, <strong>Virtual or Augmented Realities as a data medium<\/strong>. Data types will go from purely dynamic to live data, and, in most cases, will change and be produced instantly, on the go.<\/p>\n<p>Web 3.0 wouldn’t be controlled by any of the earlier-mentioned centralized institutions. Instead, it would be completely decentralized - meaning, <strong>lacking any central companies or brands that would dominate the space<\/strong>. So, no presidents or CEOs!<\/p>\n<p>How is this possible? Well, currently, Web 3.0 is explored through the lens of crypto technology. <strong>For example,<\/strong> <strong>Bloomberg has also described Web3 as a concept that “would build financial assets, in the form of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-token/">tokens, into the inner workings of almost anything you do online”.<\/strong><\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: Web 2.0 vs Web 3.0.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bebe3aa25.o.jpg/" alt=\"What is Web 3.0: Web 2.0 vs Web 3.0.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Let’s get something straight - cryptocurrencies aren’t necessarily associated with Web 3.0, at least inherently. It’s perfectly possible to create a decentralized version of the internet without any of the currently-existing crypto assets. That being the case, though, cryptocurrencies and the technology behind them help to conceptualize this goal much easier.<\/p>\n<p>Now, cryptocurrencies are built on blockchains - let’s call them, special databases that are mostly decentralized. In order to earn cryptocurrencies, oftentimes, you have to participate in a process known as “<strong>mining<\/strong>” - basically, you need to plug your computer into the network, and dedicate its resources for calculations, to help confirm the transactions happening on the said cryptocurrency's blockchain.<\/p>\n<p><strong>This way, you become an active participant in the network and help keep it decentralized.<\/strong><\/p>\n<p>Lastly, in order to send and receive cryptocurrencies, you need a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//best-cryptocurrency-wallet/">wallet - an app where your crypto assets are able to be kept safe and sound. Each wallet has two codes - <strong><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-public-address/">a public address<\/a><\/strong>, and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-private-key-secret-key/">a private key<\/strong><\/a>. The former is used for transacting with cryptocurrencies, while the latter is your secret key that is used to access the wallet, in the first place! <\/p>\n<p>I promised not to get too much into tech difficulties, so I’ll stop here. But why do I tell you all of this? <\/p>\n<p>Simply because all of these terms and concepts are <strong>relevant to Web 3.0<\/strong>!<\/p>\n<p>Within Web 3.0, individuals would probably use their cryptocurrency wallets in place of social profiles. These wallets would be used to verify your profile, and log onto certain websites, as well as to confirm actions that you’d perform on the internet - liking your friend’s profile picture, purchasing a digital drawing, or participating at a pop star gig in a Metaverse. Blockchain technology would help to perform all of these processes anonymously.<\/p>\n<p style=\"text-align: center;\"><img title=\"What is Web 3.0: User data privacy.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bf5ff2b4e.o.jpg/" alt=\"What is Web 3.0: User data privacy.\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Now, naturally, as you can probably imagine, a decentralized version of the internet would bring with itself a lot of trouble, among other things. One of the benefits of our current version of the web is the fact that <strong>there’s strict moderation involved, and illegal content is quickly removed from the mainstream websites<\/strong>.<\/p>\n<p>Who would moderate such websites if the web would be lacking any central authority? This is where the concept of “<a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-the-dao/">DAOs” comes in.<\/p>\n<p>A “DAO” is a “Decentralized Autonomous Organization”. The term sounds very fancy, but the idea itself is actually rather simple to understand, fundamentally.<\/p>\n<p>Imagine that, in Web 3.0, each website would have <strong>a dedicated cryptocurrency of its own<\/strong> (these would be known as Web 3.0 coins). If you would own some of that cryptocurrency, you could participate in the decision-making processes of that website - what content to leave up and what to remove, what should be the color scheme of the site, should there be a paywall for users to be able to join, and so on.<\/p>\n<p>Together with other holders of said cryptocurrency, you would be able to <strong>vote<\/strong> on the important questions relating to that website. This would form the aforementioned DAO - <strong>a decentralized organization that makes the core decisions behind how a website functions.<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><img title=\"What is Web 3.0: DAO.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-web-3-6270bf9599cbd.o.jpg/" alt=\"What is Web 3.0: DAO.\" width=\"1000\" height=\"600\" \/><\/strong><\/p>\n<p>Before we continue, let’s have a quick overview of what we’ve already discussed, up to this point.<\/p>\n<p>Web 3.0 is a decentralized version of the internet. <strong>It’s a conceptualized follow-up of Web 2.0<\/strong>, the current form of internet that you and I are familiar with. Web 3.0 aims to tackle things such as data privacy, large corporate entities controlling what we see on the internet, and, most importantly, user privacy. Also, it will bring us to the new mediums of data experience with Meataverses, VRs, and instant data aggregation. <\/p>\n<p>While Web 3.0 does not require cryptocurrencies to function, theoretically, the concept itself is much easier to understand when you learn how blockchains and crypto wallets work. This allows you to imagine <strong>how cryptocurrency wallets could replace online profiles, and how DAOs could be the answer to keeping things civil and legal<\/strong>.<\/p>\n<p>One more thing that you need to be aware of is something known as “<strong>the Web 3.0 Foundation<\/strong>”. Admittedly, it sounds like the core organization behind Web 3.0, right?<\/p>\n<p>Well, it’s not, really. The Web 3.0 Foundation is a group that aims to “support different projects that want to increase decentralization on the internet”.<\/p>\n<p>A noble mission - indeed! However, the organization is often criticized for being rather biased. For example, it offers grants to developers, but only those who would use the popular cryptocurrency <strong>Polkadot’s blockchain<\/strong> to create their projects. The entirety of the foundation itself is centered around said blockchain, so you can see why there are people who aren’t too excited about this organization.<\/p>\n<p>This leads me to my final point and something that I want to leave you off with. As I’ve hinted at throughout the entirety of this section, as of now, <strong>Web 3.0 is still just a rough idea, and a concept<\/strong>. Meaning, while there are theories of what this version of the internet should look like, and ideas of how it can be developed, it’s still very much <strong>in its infancy stage<\/strong>!<\/p>\n<p>Following that, many companies and organizations may try to capitalize on this, and influence how people view the concept, in the first place. Do not fall for it! While the idea of a decentralized web is very exciting, there are still many, many questions that need to be answered, and problems that need to be tackled until this concept becomes even remotely viable. <strong>Such as, what will happen if the biggest part of DAO’s votes will be concentrated in one person’s hands?<\/strong> <strong>Do we get back to the centralized internet? How to avoid that?<\/strong><\/p>\n<p>And so, that’s it! If you would like to learn more about the world of crypto, check out the section - \"<a href=https://www.bitdegree.org/"//crypto//learn//what-are-nfts/">What are NFTs?<\/strong><\/a>\"<\/p>","youtube_video":{"id":10,"channel_id":1,"sort":94,"video_title":"What is Web3? (Animated Explanation + Examples)","description":"Web 3.0, more commonly known as simply Web3, is an idea of a new and improved Internet. Faster, smarter, and completely anonymous, the idea of a New Internet has been spreading like wildfire!\n\nAs user privacy concerns have been popping up more and more over the last few years, the idea of a decentralized and anonymous New Internet has become the talk of the town. In this video, I\u2019ll explain to you what Web 3.0 is in simple terms, and by using everyday examples and analogies, so by the end of the video, you will know exactly what makes Web 3.0 so revolutionary and exciting!\n\nWhat are your opinions on the Web3 predictions? Share your thoughts in the comments below!\n\nVideo Time Table:\n\n0:00 Introduction to Web3\n1:09 What is Web3?\n1:42 What is Web1.0?\n3:27 What is Web2.0?\n5:39 Web2.0 vs Web3\n9:19 What is DAO?\n10:14 Quick Overview\n11:08 Web3 Foundation\n11:50 Wrap-up: What is Web3?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#Web3.0 #WhatIsWeb3 #GuideToWeb3 #Web3 #NewInternet #Blockchain #Crypto","video_id":"X_ushcDQZ5U","duration":798,"view_count":1213,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-web3-animated-explanation-examples.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-01-24T17:55:51.000000Z","created_at":"2022-02-21T13:20:28.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}"
:model="{"id":5,"chapter_id":6,"order":6,"featured_image_id":3038,"youtube_video_id":7,"author_id":1,"created_at":"2022-05-02T10:34:33.000000Z","updated_at":"2023-12-22T12:01:54.000000Z","slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","content":"<p>Have you ever played on an online slot machine? If you have, or maybe just have seen it, then you’re probably quite familiar with the premise of how it works - you wager some money, and press the button to play. If the outcome of the images that appear on the screen is in your favor, you will be paid out your winnings right after.<\/p>\n<p><strong>In other words, once you initiate the slot machine, the process happens automatically, and depending on the outcome, rewards are paid out automatically, as well.<\/strong> This is actually exactly how smart contracts function, as well.<\/p>\n<p>In this section, we’re covering smart contracts. Specifically, what smart contracts are, how they work, and what they are used for.<\/p>\n<p>Let’s get right to it!<\/p>\n<h2>What are Smart Contracts?<\/h2>\n<p>Officially, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">Smart Contracts<\/strong><\/a> in crypto are a set of pre-coded rules that will initiate some actions on the blockchain without interventions from a third party. You can call it a program, or simply, <strong>a blockchain app, with its own sense of how things should work in one situation, or another<\/strong>. Smart contracts are built by developers and launched on blockchains to bring some logic into people's actions. Let’s just say, it makes blockchains work smarter, and in accordance to set conditions.<\/p>\n<p>So - what are smart contracts in human-speak, exactly?<\/p>\n<p>Well, as the name implies, they are contractual obligations for something to happen. In other words, if you make an agreement with your friend that you’ll mow their lawn if they help you with your math homework, this can be considered a contract.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: What are smart contracts?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-1.o.jpg/" alt=\"What are smart contracts: What are smart contracts?\" width=\"1000\" height=\"300\" \/><\/p>\n<p>Obviously, the “smart” part in the term “smart contract” is the important bit. To put it simply, it signifies that <strong>the contract will be executed automatically, without human intervention<\/strong>, and that once it’s set, it cannot be altered.<\/p>\n<p>A close example of this idea is if you’d decide to take out a loan. You would have to settle the details with your bank, and sign a contract. Once all of the details are settled, your bank would pay out the money into your bank account.<\/p>\n<p>In this situation, though, the process is performed by a human - someone checks your information, and pays out your loan, or maybe not! With a smart contract, there would be no middleman - <strong>your information would be verified automatically, according to some set criteria, and the money would be paid out without human intervention, as well.<\/strong><\/p>\n<p>This is one of the core purposes that smart contracts serve, in the first place - they allow for certain processes to happen automatically, without the need for a human being to intervene. Think of a coffee machine - instead of boiling the water in a kettle, adding coffee to a mug, and then filling the mug with hot water, all that you need to do is push a button on the coffee machine, and wait - the process happens automatically! And YES, now you can call your coffee machine a smart one. <strong>Smart, because it works based on some initially programmed logic with no need for third parties to be involved.<\/strong> The absolute same can be said about Smart Contracts.<\/p>\n<p>It’s convenient, fast, and effective. However, what if you decide that you actually want tea instead of coffee, midway through the machine making your drink? You could probably just press one button, and cancel the process!<\/p>\n<p>Well, this is an opposite core feature of smart contracts - once they’re in action, there’s no going back. No matter what happens, <strong>a smart contract will be executed, once it’s started<\/strong>.<\/p>\n<p>While this does sound a bit intimidating, I assure you - this is a good thing!<\/p>\n<p>The strict nature of smart contract execution means that users won’t be tricked, once the contract is in motion. Let’s go back to the coffee machine example. Imagine that you really want a cup of coffee - you set the machine to start making your favorite latte, and then go to do something else while it does the deed. However, some guy walks past the machine, notices that you’re making coffee for yourself, and decides to press the “STOP” button, simply to pull a prank on you.<\/p>\n<p>You come back, and the machine is turned off, with no coffee to be made - that’s frustrating!<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: What is the core purpose of smart contracts?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-3.o.jpg/" alt=\"What are smart contracts: What is the core purpose of smart contracts?\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Now, sure - this is nothing more than a minor inconvenience. However, since smart contracts usually involve money (and lots of it!), the risks would be far more dire and noteworthy.<\/p>\n<p>In other words, <strong>malicious individuals would be able to scam investors out of their funds by promising something great and then simply running away with the money<\/strong>. Smart contracts help potential investors avoid this by checking out the details behind them, and providing the guarantees that, once initiated, the contracts won’t be altered.<\/p>\n<p>How? Unlike coffee machine logic, smart contracts are public, so anyone can check and see what exact logic is set, and when and how it will proceed after you perform one action or another. And this is definitely a <strong>transparency<\/strong> question! If some blockchain activities involve hundreds or thousands of people, the community will always check what will happen according to the smart contract initiated for those activities. <\/p>\n<h2>How Do Smart Contracts Work?<\/h2>\n<p>Let’s look into how smart contracts work, exactly.<\/p>\n<p>The vast majority of smart contracts are built (and issued) on the smart network - specifically, the <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum network. And this is the key difference between Ethereum-based blockchains and <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoins’. /nEthereum is a “smart” crypto-powered network - a decentralized (no single authority-possessing) global node of computers, if you will.<\/strong> On it, people are able to create various applications, including smart contracts. Bitcoins’ blockchain network, is, let’s call it - the dumb one, because of its lack of smart functionality. So, no smart contracts on a Bitcoin network.<\/p>\n<p>Namely, on Ethereum, smart contracts are built with the help of <strong>Solidity<\/strong> - a programming language that was specifically designed for developers working with the Ethereum network. These developers receive the criteria for a smart contract (for example, “if Sam pays me $10, I will send Sam the article”), and then create it by using Solidity. Essentially, a smart contract is basically an <strong>“IF something happens, THEN do this”<\/strong> function.<\/p>\n<p>When a smart contract is created, it needs to be deployed on the network. Once that happens, the contract becomes active, and the terms of the contract can be executed.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: How do smart contracts work?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-4.o.jpg/" alt=\"What are smart contracts: How do smart contracts work?\" width=\"1000\" height=\"400\" \/><\/p>\n<p>As I’ve mentioned earlier, <strong>smart contracts work in an automatic manner<\/strong>. This means that, once they’re deployed, developers won’t need to add or change anything else - if the terms of the contract are met, it will perform its intended function.<\/p>\n<p>Furthermore, I would like to reiterate the fact that smart contracts are <strong>immutable<\/strong> - in other words, they can't be changed. This makes them secure and reliable, as long as the conditions by which they were deployed were checked and verified to be fair.<\/p>\n<p>That said, you might be wondering - WHY can’t smart contracts be tampered with? Specifically, how is this ensured?<\/p>\n<p>Well, this is thanks to blockchain technology. I won’t go too in-depth with the technical stuff on how that works, since it’s an entire section of its own, but in essence, in order to change the terms of a smart contract once it’s deployed, <strong>you’d need to be in command of at least 51% of the blockchain that the contract is based on<\/strong> - this is practically impossible.<\/p>\n<p>And also if you’d like to find out more about how <a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">blockchains work, make sure to check out the section on the topic.<\/p>\n<h2>What Can Smart Contracts Be Used for?<\/h2>\n<p>So - thus far, we’ve covered what smart contracts are, and also how they perform the processes that they do. As a final point, let’s take a look at some examples of what these pieces of technology can be used for.<\/p>\n<p>For starters, let’s say that you’re a farmer who wants to insure their crops, in case there’s a drought this year. The insurance company uses a smart contract for your insurance, with these terms:<\/p>\n<p><strong>“If the air temperature between the months A and B is above 90 degrees Fahrenheit for at least C amount of days, consecutively, pay out the farmer X amount of money.”<\/strong><\/p>\n<p>The insurance company would then make the smart contract track the local weather news platforms that have high reliability. Thus, the entire process would be automatized - <strong>if there was a drought that year, you would automatically receive your insurance payout!<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><img title=\"What are smart contracts: What are smart contracts used for?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-5.o.jpg/" alt=\"What are smart contracts: What are smart contracts used for?\" width=\"999\" height=\"368\" \/><\/strong><\/p>\n<p>And what's most important is that nobody ever will change the rules you, as the farmer, agreed to.<\/p>\n<p>Here’s another example - imagine that you want to receive a yearly bonus in your job, and are trying to negotiate it with your boss. Your boss lays down the requirements that you need to meet in order to receive that bonus and gives you a deadline. He also creates a smart contract that states:<\/p>\n<p><strong>“If A performs B, C, and D tasks until December 31st, 2022, A receives a bonus of X amount of money.”<\/strong><\/p>\n<p>In a situation like this, you know that you will DEFINITELY receive the bonus, if you meet all of the requirements by the end of the year - after all, once the smart contract is created, there’s no turning back! <em>And your crazy boss will never change his opinion just because of bad weather!<\/em><\/p>\n<p style=\"text-align: center;\"><em><img title=\"What are smart contracts: An example of using a smart contract.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-6.o.jpg/" alt=\"What are smart contracts: An example of using a smart contract.\" width=\"1000\" height=\"339\" \/><\/em><\/p>\n<p>These are just a couple of examples that illustrate the potential of smart contract technology. Truth be told, the opportunities for smart contract application are vast - this technology can be incorporated into a huge variety of different areas, and, frankly, <strong>smart contracts are making their way into the mainstream<\/strong>, as we speak!<\/p>\n<p>So, in this section, we’ve covered all of the essential information that you need to know about smart contracts - what they are, how they work, and the variety of different ways of how we can use them. If you would like to learn about various crypto topics - check out our section about <a href=https://www.bitdegree.org/"//crypto//learn//what-are-nfts/">NFTs.","definition":"Did you know that it is impossible to stop or adjust a smart contract once it's started?","status":"published","meta_title":"What are Smart Contracts: Smart Contracts Explained","meta_description":"Wondering what are smart contracts and how they work? Check out this in-depth explanation alongside a lot of easy-to-understand examples.","meta_keywords":"what are smart contracts, what are smart contracts explained, what are smart contracts used for","modified_content":"<p>Have you ever played on an online slot machine? If you have, or maybe just have seen it, then you’re probably quite familiar with the premise of how it works - you wager some money, and press the button to play. If the outcome of the images that appear on the screen is in your favor, you will be paid out your winnings right after.<\/p>\n<p><strong>In other words, once you initiate the slot machine, the process happens automatically, and depending on the outcome, rewards are paid out automatically, as well.<\/strong> This is actually exactly how smart contracts function, as well.<\/p>\n<p>In this section, we’re covering smart contracts. Specifically, what smart contracts are, how they work, and what they are used for.<\/p>\n<p>Let’s get right to it!<\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is a Smart Contract? (Explained with Animations)\"\n title=\"What is a Smart Contract? (Explained with Animations)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: What is the Core Purpose of Smart Contracts?<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"What is the Core Purpose of Smart Contracts?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"0VCMtKx9AxU\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">What is a Smart Contract? (Explained with Animations)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-a-smart-contract-explained-with-animations.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-a-smart-contract-explained-with-animations.jpg?tr=w-760 1000w\"\n alt=\"What is a Smart Contract? (Explained with Animations)\"\n title=\"What is a Smart Contract? (Explained with Animations)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is a Smart Contract? (Explained with Animations)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What are Smart Contracts?<\/h2>\n<p>Officially, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">Smart Contracts<\/strong><\/a> in crypto are a set of pre-coded rules that will initiate some actions on the blockchain without interventions from a third party. You can call it a program, or simply, <strong>a blockchain app, with its own sense of how things should work in one situation, or another<\/strong>. Smart contracts are built by developers and launched on blockchains to bring some logic into people's actions. Let’s just say, it makes blockchains work smarter, and in accordance to set conditions.<\/p>\n<p>So - what are smart contracts in human-speak, exactly?<\/p>\n<p>Well, as the name implies, they are contractual obligations for something to happen. In other words, if you make an agreement with your friend that you’ll mow their lawn if they help you with your math homework, this can be considered a contract.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: What are smart contracts?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-1.o.jpg/" alt=\"What are smart contracts: What are smart contracts?\" width=\"1000\" height=\"300\" \/><\/p>\n<p>Obviously, the “smart” part in the term “smart contract” is the important bit. To put it simply, it signifies that <strong>the contract will be executed automatically, without human intervention<\/strong>, and that once it’s set, it cannot be altered.<\/p>\n<p>A close example of this idea is if you’d decide to take out a loan. You would have to settle the details with your bank, and sign a contract. Once all of the details are settled, your bank would pay out the money into your bank account.<\/p>\n<p>In this situation, though, the process is performed by a human - someone checks your information, and pays out your loan, or maybe not! With a smart contract, there would be no middleman - <strong>your information would be verified automatically, according to some set criteria, and the money would be paid out without human intervention, as well.<\/strong><\/p>\n<p>This is one of the core purposes that smart contracts serve, in the first place - they allow for certain processes to happen automatically, without the need for a human being to intervene. Think of a coffee machine - instead of boiling the water in a kettle, adding coffee to a mug, and then filling the mug with hot water, all that you need to do is push a button on the coffee machine, and wait - the process happens automatically! And YES, now you can call your coffee machine a smart one. <strong>Smart, because it works based on some initially programmed logic with no need for third parties to be involved.<\/strong> The absolute same can be said about Smart Contracts.<\/p>\n<p>It’s convenient, fast, and effective. However, what if you decide that you actually want tea instead of coffee, midway through the machine making your drink? You could probably just press one button, and cancel the process!<\/p>\n<p>Well, this is an opposite core feature of smart contracts - once they’re in action, there’s no going back. No matter what happens, <strong>a smart contract will be executed, once it’s started<\/strong>.<\/p>\n<p>While this does sound a bit intimidating, I assure you - this is a good thing!<\/p>\n<p>The strict nature of smart contract execution means that users won’t be tricked, once the contract is in motion. Let’s go back to the coffee machine example. Imagine that you really want a cup of coffee - you set the machine to start making your favorite latte, and then go to do something else while it does the deed. However, some guy walks past the machine, notices that you’re making coffee for yourself, and decides to press the “STOP” button, simply to pull a prank on you.<\/p>\n<p>You come back, and the machine is turned off, with no coffee to be made - that’s frustrating!<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: What is the core purpose of smart contracts?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-3.o.jpg/" alt=\"What are smart contracts: What is the core purpose of smart contracts?\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Now, sure - this is nothing more than a minor inconvenience. However, since smart contracts usually involve money (and lots of it!), the risks would be far more dire and noteworthy.<\/p>\n<p>In other words, <strong>malicious individuals would be able to scam investors out of their funds by promising something great and then simply running away with the money<\/strong>. Smart contracts help potential investors avoid this by checking out the details behind them, and providing the guarantees that, once initiated, the contracts won’t be altered.<\/p>\n<p>How? Unlike coffee machine logic, smart contracts are public, so anyone can check and see what exact logic is set, and when and how it will proceed after you perform one action or another. And this is definitely a <strong>transparency<\/strong> question! If some blockchain activities involve hundreds or thousands of people, the community will always check what will happen according to the smart contract initiated for those activities. <\/p>\n<h2>How Do Smart Contracts Work?<\/h2>\n<p>Let’s look into how smart contracts work, exactly.<\/p>\n<p>The vast majority of smart contracts are built (and issued) on the smart network - specifically, the <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum network. And this is the key difference between Ethereum-based blockchains and <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoins’. /nEthereum is a “smart” crypto-powered network - a decentralized (no single authority-possessing) global node of computers, if you will.<\/strong> On it, people are able to create various applications, including smart contracts. Bitcoins’ blockchain network, is, let’s call it - the dumb one, because of its lack of smart functionality. So, no smart contracts on a Bitcoin network.<\/p>\n<p>Namely, on Ethereum, smart contracts are built with the help of <strong>Solidity<\/strong> - a programming language that was specifically designed for developers working with the Ethereum network. These developers receive the criteria for a smart contract (for example, “if Sam pays me $10, I will send Sam the article”), and then create it by using Solidity. Essentially, a smart contract is basically an <strong>“IF something happens, THEN do this”<\/strong> function.<\/p>\n<p>When a smart contract is created, it needs to be deployed on the network. Once that happens, the contract becomes active, and the terms of the contract can be executed.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: How do smart contracts work?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-4.o.jpg/" alt=\"What are smart contracts: How do smart contracts work?\" width=\"1000\" height=\"400\" \/><\/p>\n<p>As I’ve mentioned earlier, <strong>smart contracts work in an automatic manner<\/strong>. This means that, once they’re deployed, developers won’t need to add or change anything else - if the terms of the contract are met, it will perform its intended function.<\/p>\n<p>Furthermore, I would like to reiterate the fact that smart contracts are <strong>immutable<\/strong> - in other words, they can't be changed. This makes them secure and reliable, as long as the conditions by which they were deployed were checked and verified to be fair.<\/p>\n<p>That said, you might be wondering - WHY can’t smart contracts be tampered with? Specifically, how is this ensured?<\/p>\n<p>Well, this is thanks to blockchain technology. I won’t go too in-depth with the technical stuff on how that works, since it’s an entire section of its own, but in essence, in order to change the terms of a smart contract once it’s deployed, <strong>you’d need to be in command of at least 51% of the blockchain that the contract is based on<\/strong> - this is practically impossible.<\/p>\n<p>And also if you’d like to find out more about how <a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">blockchains work, make sure to check out the section on the topic.<\/p>\n<h2>What Can Smart Contracts Be Used for?<\/h2>\n<p>So - thus far, we’ve covered what smart contracts are, and also how they perform the processes that they do. As a final point, let’s take a look at some examples of what these pieces of technology can be used for.<\/p>\n<p>For starters, let’s say that you’re a farmer who wants to insure their crops, in case there’s a drought this year. The insurance company uses a smart contract for your insurance, with these terms:<\/p>\n<p><strong>“If the air temperature between the months A and B is above 90 degrees Fahrenheit for at least C amount of days, consecutively, pay out the farmer X amount of money.”<\/strong><\/p>\n<p>The insurance company would then make the smart contract track the local weather news platforms that have high reliability. Thus, the entire process would be automatized - <strong>if there was a drought that year, you would automatically receive your insurance payout!<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><img title=\"What are smart contracts: What are smart contracts used for?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-5.o.jpg/" alt=\"What are smart contracts: What are smart contracts used for?\" width=\"999\" height=\"368\" \/><\/strong><\/p>\n<p>And what's most important is that nobody ever will change the rules you, as the farmer, agreed to.<\/p>\n<p>Here’s another example - imagine that you want to receive a yearly bonus in your job, and are trying to negotiate it with your boss. Your boss lays down the requirements that you need to meet in order to receive that bonus and gives you a deadline. He also creates a smart contract that states:<\/p>\n<p><strong>“If A performs B, C, and D tasks until December 31st, 2022, A receives a bonus of X amount of money.”<\/strong><\/p>\n<p>In a situation like this, you know that you will DEFINITELY receive the bonus, if you meet all of the requirements by the end of the year - after all, once the smart contract is created, there’s no turning back! <em>And your crazy boss will never change his opinion just because of bad weather!<\/em><\/p>\n<p style=\"text-align: center;\"><em><img title=\"What are smart contracts: An example of using a smart contract.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-6.o.jpg/" alt=\"What are smart contracts: An example of using a smart contract.\" width=\"1000\" height=\"339\" \/><\/em><\/p>\n<p>These are just a couple of examples that illustrate the potential of smart contract technology. Truth be told, the opportunities for smart contract application are vast - this technology can be incorporated into a huge variety of different areas, and, frankly, <strong>smart contracts are making their way into the mainstream<\/strong>, as we speak!<\/p>\n<p>So, in this section, we’ve covered all of the essential information that you need to know about smart contracts - what they are, how they work, and the variety of different ways of how we can use them. If you would like to learn about various crypto topics - check out our section about <a href=https://www.bitdegree.org/"//crypto//learn//what-are-nfts/">NFTs.","youtube_video":{"id":7,"channel_id":1,"sort":91,"video_title":"What is a Smart Contract? (Explained with Animations)","description":"What is a Smart Contract?\n\nSmart contracts are automated agreements between two or more parties for something to happen. Essentially, they are blockchain-based lines of code that allow users to perform transactions without a middleman, or some sort of a third-party escrow service provider.\n\nApplication options for smart contracts are vast, and the use cases for this piece of blockchain technology are expanding every single day. If you want to learn about the awesome areas where smart contracts can be used, you\u2019ll find all of the relevant information in my video! I will also explain how smart contracts work, in the simplest way possible.\n\nWhat do you think smart contracts can be used for, as far as daily chores and activities go? Share your opinions in the comments below!\n\nVideo Time Table:\n\n00:00 Introduction to What Are Smart Contracts\n1:08 What Are Smart Contracts?\n2:51 What is the Core Purpose of Smart Contracts?\n5:40 How Do Smart Contracts Work?\n8:21 What Are Smart Contracts Used For?\n10:10 Wrap-up: What Are Smart Contracts?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#SmartContract #SmartContracts #WhatisaSmartContract #WhatAreSmartContracts #SmartContractsBlockchain #SmartContractsExplained","video_id":"0VCMtKx9AxU","duration":660,"view_count":1354,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-a-smart-contract-explained-with-animations.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-01-31T08:51:06.000000Z","created_at":"2022-02-21T13:20:28.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":3038,"uuid":"c656f803-c0c8-4c63-82ee-164ab8746adf","name":"what-are-smart-contracts.o.jpg","url":"https:\/\/assets.bitdegree.org\/crypto\/storage\/media\/what-are-smart-contracts.o.jpg","path":"crypto\/storage\/media\/what-are-smart-contracts.o.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":106437,"width":768,"height":478,"custom_properties":null,"created_at":"2023-06-19T06:58:36.000000Z","updated_at":"2023-06-19T06:58:36.000000Z"}}"
:chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming Techniques","status":"published","modified_content":null},{"chapter_id":6,"order":12,"slug":"what-is-an-oracle-in-crypto","title":"Crypto Oracles: The Link Between Blockchain and Outside World Data","status":"published","modified_content":null},{"chapter_id":6,"order":13,"slug":"crypto-gambling","title":"The Peculiarities of Decentralized Crypto Gambling","status":"published","modified_content":null},{"chapter_id":6,"order":14,"slug":"what-is-the-metaverse","title":"Metaverse: A New Perception of Reality","status":"published","modified_content":null}]},{"id":7,"title":"Trading & Investing","slug":"trading-and-investing","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-trading.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-trading-101.jpg","rating":80,"sections":[{"chapter_id":7,"order":1,"slug":"where-to-trade-crypto","title":"Where Can You Trade Cryptocurrencies?","status":"published","modified_content":null},{"chapter_id":7,"order":2,"slug":"how-to-invest-in-crypto","title":"Investing in Crypto: What Investing Options Do You Have?","status":"published","modified_content":null},{"chapter_id":7,"order":3,"slug":"ico-vs-ido","title":"ICO vs IDO vs IEO: Which One is the One?","status":"published","modified_content":null},{"chapter_id":7,"order":4,"slug":"what-is-an-airdrop","title":"What are Crypto Airdrops and How to Get Them?","status":"published","modified_content":null},{"chapter_id":7,"order":5,"slug":"how-to-get-free-crypto","title":"How to Get Free Crypto Assets?","status":"published","modified_content":null},{"chapter_id":7,"order":6,"slug":"how-to-arbitrage-crypto","title":"What is Crypto Arbitrage: The Main Principles","status":"published","modified_content":null},{"chapter_id":7,"order":7,"slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration Date","status":"published","modified_content":null},{"chapter_id":7,"order":8,"slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":9,"slug":"investing-in-cryptocurrency","title":"Investing in Cryptocurrency: How to Manage Your Risks?","status":"published","modified_content":null},{"chapter_id":7,"order":10,"slug":"what-is-a-rug-pull-in-crypto","title":"What is a Rug Pull in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":11,"slug":"how-to-avoid-rug-pulls-in-crypto","title":"How to Spot and Avoid Rug Pulls?","status":"published","modified_content":null},{"chapter_id":7,"order":12,"slug":"how-to-avoid-crypto-taxes","title":"The Key Legal Techniques of Avoiding Crypto Taxes","status":"published","modified_content":null}]},{"id":8,"title":"Crypto Analysis","slug":"crypto-analysis","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-analysis.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-analysis-101.jpg","rating":100,"sections":[{"chapter_id":8,"order":1,"slug":"what-is-bullish-and-bearish","title":"Bearish and Bullish Markets: Do They Matter?","status":"published","modified_content":null},{"chapter_id":8,"order":2,"slug":"best-technical-analysis-indicators-for-crypto","title":"5 Best Crypto Technical Analysis Indicators You Must Know About","status":"published","modified_content":null},{"chapter_id":8,"order":3,"slug":"what-is-candlesticks","title":"Technical Analysis: What are Candlesticks, Trendlines, and Patterns?","status":"published","modified_content":null},{"chapter_id":8,"order":4,"slug":"how-to-track-new-crypto-coins","title":"Crypto Tracking: How to Track Your Favorite Coins & Tokens?","status":"published","modified_content":null},{"chapter_id":8,"order":5,"slug":"how-to-research-crypto","title":"Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy","status":"published","modified_content":null},{"chapter_id":8,"order":46,"slug":"portfolio-diversification-definition","title":"Portfolio Diversification: The Whats, the Whys, and the Hows","status":"published","modified_content":null}]},{"id":9,"title":"Mining","slug":"mining","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-mining.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-mining-101.jpg","rating":80,"sections":[{"chapter_id":9,"order":1,"slug":"what-is-crypto-mining","title":"Crypto Mining: What It is and How Does It Work?","status":"published","modified_content":null},{"chapter_id":9,"order":2,"slug":"what-is-a-mining-pool","title":"Mining Pools: Is Collective Mining Better Than Solo Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]"
current-chapter="dapps-and-defi"
current-section="what-are-smart-contracts">
Ethereum is a “smart” crypto-powered network - a decentralized (no single authority-possessing) global node of computers, if you will.<\/strong> On it, people are able to create various applications, including smart contracts. Bitcoins’ blockchain network, is, let’s call it - the dumb one, because of its lack of smart functionality. So, no smart contracts on a Bitcoin network.<\/p>\n<p>Namely, on Ethereum, smart contracts are built with the help of <strong>Solidity<\/strong> - a programming language that was specifically designed for developers working with the Ethereum network. These developers receive the criteria for a smart contract (for example, “if Sam pays me $10, I will send Sam the article”), and then create it by using Solidity. Essentially, a smart contract is basically an <strong>“IF something happens, THEN do this”<\/strong> function.<\/p>\n<p>When a smart contract is created, it needs to be deployed on the network. Once that happens, the contract becomes active, and the terms of the contract can be executed.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: How do smart contracts work?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-4.o.jpg/" alt=\"What are smart contracts: How do smart contracts work?\" width=\"1000\" height=\"400\" \/><\/p>\n<p>As I’ve mentioned earlier, <strong>smart contracts work in an automatic manner<\/strong>. This means that, once they’re deployed, developers won’t need to add or change anything else - if the terms of the contract are met, it will perform its intended function.<\/p>\n<p>Furthermore, I would like to reiterate the fact that smart contracts are <strong>immutable<\/strong> - in other words, they can't be changed. This makes them secure and reliable, as long as the conditions by which they were deployed were checked and verified to be fair.<\/p>\n<p>That said, you might be wondering - WHY can’t smart contracts be tampered with? Specifically, how is this ensured?<\/p>\n<p>Well, this is thanks to blockchain technology. I won’t go too in-depth with the technical stuff on how that works, since it’s an entire section of its own, but in essence, in order to change the terms of a smart contract once it’s deployed, <strong>you’d need to be in command of at least 51% of the blockchain that the contract is based on<\/strong> - this is practically impossible.<\/p>\n<p>And also if you’d like to find out more about how <a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">blockchains work, make sure to check out the section on the topic.<\/p>\n<h2>What Can Smart Contracts Be Used for?<\/h2>\n<p>So - thus far, we’ve covered what smart contracts are, and also how they perform the processes that they do. As a final point, let’s take a look at some examples of what these pieces of technology can be used for.<\/p>\n<p>For starters, let’s say that you’re a farmer who wants to insure their crops, in case there’s a drought this year. The insurance company uses a smart contract for your insurance, with these terms:<\/p>\n<p><strong>“If the air temperature between the months A and B is above 90 degrees Fahrenheit for at least C amount of days, consecutively, pay out the farmer X amount of money.”<\/strong><\/p>\n<p>The insurance company would then make the smart contract track the local weather news platforms that have high reliability. Thus, the entire process would be automatized - <strong>if there was a drought that year, you would automatically receive your insurance payout!<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><img title=\"What are smart contracts: What are smart contracts used for?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-5.o.jpg/" alt=\"What are smart contracts: What are smart contracts used for?\" width=\"999\" height=\"368\" \/><\/strong><\/p>\n<p>And what's most important is that nobody ever will change the rules you, as the farmer, agreed to.<\/p>\n<p>Here’s another example - imagine that you want to receive a yearly bonus in your job, and are trying to negotiate it with your boss. Your boss lays down the requirements that you need to meet in order to receive that bonus and gives you a deadline. He also creates a smart contract that states:<\/p>\n<p><strong>“If A performs B, C, and D tasks until December 31st, 2022, A receives a bonus of X amount of money.”<\/strong><\/p>\n<p>In a situation like this, you know that you will DEFINITELY receive the bonus, if you meet all of the requirements by the end of the year - after all, once the smart contract is created, there’s no turning back! <em>And your crazy boss will never change his opinion just because of bad weather!<\/em><\/p>\n<p style=\"text-align: center;\"><em><img title=\"What are smart contracts: An example of using a smart contract.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-6.o.jpg/" alt=\"What are smart contracts: An example of using a smart contract.\" width=\"1000\" height=\"339\" \/><\/em><\/p>\n<p>These are just a couple of examples that illustrate the potential of smart contract technology. Truth be told, the opportunities for smart contract application are vast - this technology can be incorporated into a huge variety of different areas, and, frankly, <strong>smart contracts are making their way into the mainstream<\/strong>, as we speak!<\/p>\n<p>So, in this section, we’ve covered all of the essential information that you need to know about smart contracts - what they are, how they work, and the variety of different ways of how we can use them. If you would like to learn about various crypto topics - check out our section about <a href=https://www.bitdegree.org/"//crypto//learn//what-are-nfts/">NFTs.","definition":"Did you know that it is impossible to stop or adjust a smart contract once it's started?","status":"published","meta_title":"What are Smart Contracts: Smart Contracts Explained","meta_description":"Wondering what are smart contracts and how they work? Check out this in-depth explanation alongside a lot of easy-to-understand examples.","meta_keywords":"what are smart contracts, what are smart contracts explained, what are smart contracts used for","modified_content":"<p>Have you ever played on an online slot machine? If you have, or maybe just have seen it, then you’re probably quite familiar with the premise of how it works - you wager some money, and press the button to play. If the outcome of the images that appear on the screen is in your favor, you will be paid out your winnings right after.<\/p>\n<p><strong>In other words, once you initiate the slot machine, the process happens automatically, and depending on the outcome, rewards are paid out automatically, as well.<\/strong> This is actually exactly how smart contracts function, as well.<\/p>\n<p>In this section, we’re covering smart contracts. Specifically, what smart contracts are, how they work, and what they are used for.<\/p>\n<p>Let’s get right to it!<\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is a Smart Contract? (Explained with Animations)\"\n title=\"What is a Smart Contract? (Explained with Animations)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: What is the Core Purpose of Smart Contracts?<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"What is the Core Purpose of Smart Contracts?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"0VCMtKx9AxU\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">What is a Smart Contract? (Explained with Animations)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-a-smart-contract-explained-with-animations.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-a-smart-contract-explained-with-animations.jpg?tr=w-760 1000w\"\n alt=\"What is a Smart Contract? (Explained with Animations)\"\n title=\"What is a Smart Contract? (Explained with Animations)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is a Smart Contract? (Explained with Animations)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What are Smart Contracts?<\/h2>\n<p>Officially, <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">Smart Contracts<\/strong><\/a> in crypto are a set of pre-coded rules that will initiate some actions on the blockchain without interventions from a third party. You can call it a program, or simply, <strong>a blockchain app, with its own sense of how things should work in one situation, or another<\/strong>. Smart contracts are built by developers and launched on blockchains to bring some logic into people's actions. Let’s just say, it makes blockchains work smarter, and in accordance to set conditions.<\/p>\n<p>So - what are smart contracts in human-speak, exactly?<\/p>\n<p>Well, as the name implies, they are contractual obligations for something to happen. In other words, if you make an agreement with your friend that you’ll mow their lawn if they help you with your math homework, this can be considered a contract.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: What are smart contracts?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-1.o.jpg/" alt=\"What are smart contracts: What are smart contracts?\" width=\"1000\" height=\"300\" \/><\/p>\n<p>Obviously, the “smart” part in the term “smart contract” is the important bit. To put it simply, it signifies that <strong>the contract will be executed automatically, without human intervention<\/strong>, and that once it’s set, it cannot be altered.<\/p>\n<p>A close example of this idea is if you’d decide to take out a loan. You would have to settle the details with your bank, and sign a contract. Once all of the details are settled, your bank would pay out the money into your bank account.<\/p>\n<p>In this situation, though, the process is performed by a human - someone checks your information, and pays out your loan, or maybe not! With a smart contract, there would be no middleman - <strong>your information would be verified automatically, according to some set criteria, and the money would be paid out without human intervention, as well.<\/strong><\/p>\n<p>This is one of the core purposes that smart contracts serve, in the first place - they allow for certain processes to happen automatically, without the need for a human being to intervene. Think of a coffee machine - instead of boiling the water in a kettle, adding coffee to a mug, and then filling the mug with hot water, all that you need to do is push a button on the coffee machine, and wait - the process happens automatically! And YES, now you can call your coffee machine a smart one. <strong>Smart, because it works based on some initially programmed logic with no need for third parties to be involved.<\/strong> The absolute same can be said about Smart Contracts.<\/p>\n<p>It’s convenient, fast, and effective. However, what if you decide that you actually want tea instead of coffee, midway through the machine making your drink? You could probably just press one button, and cancel the process!<\/p>\n<p>Well, this is an opposite core feature of smart contracts - once they’re in action, there’s no going back. No matter what happens, <strong>a smart contract will be executed, once it’s started<\/strong>.<\/p>\n<p>While this does sound a bit intimidating, I assure you - this is a good thing!<\/p>\n<p>The strict nature of smart contract execution means that users won’t be tricked, once the contract is in motion. Let’s go back to the coffee machine example. Imagine that you really want a cup of coffee - you set the machine to start making your favorite latte, and then go to do something else while it does the deed. However, some guy walks past the machine, notices that you’re making coffee for yourself, and decides to press the “STOP” button, simply to pull a prank on you.<\/p>\n<p>You come back, and the machine is turned off, with no coffee to be made - that’s frustrating!<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: What is the core purpose of smart contracts?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-3.o.jpg/" alt=\"What are smart contracts: What is the core purpose of smart contracts?\" width=\"1000\" height=\"600\" \/><\/p>\n<p>Now, sure - this is nothing more than a minor inconvenience. However, since smart contracts usually involve money (and lots of it!), the risks would be far more dire and noteworthy.<\/p>\n<p>In other words, <strong>malicious individuals would be able to scam investors out of their funds by promising something great and then simply running away with the money<\/strong>. Smart contracts help potential investors avoid this by checking out the details behind them, and providing the guarantees that, once initiated, the contracts won’t be altered.<\/p>\n<p>How? Unlike coffee machine logic, smart contracts are public, so anyone can check and see what exact logic is set, and when and how it will proceed after you perform one action or another. And this is definitely a <strong>transparency<\/strong> question! If some blockchain activities involve hundreds or thousands of people, the community will always check what will happen according to the smart contract initiated for those activities. <\/p>\n<h2>How Do Smart Contracts Work?<\/h2>\n<p>Let’s look into how smart contracts work, exactly.<\/p>\n<p>The vast majority of smart contracts are built (and issued) on the smart network - specifically, the <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum network. And this is the key difference between Ethereum-based blockchains and <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoins’. /n Ethereum is a “smart” crypto-powered network - a decentralized (no single authority-possessing) global node of computers, if you will.<\/strong> On it, people are able to create various applications, including smart contracts. Bitcoins’ blockchain network, is, let’s call it - the dumb one, because of its lack of smart functionality. So, no smart contracts on a Bitcoin network.<\/p>\n<p>Namely, on Ethereum, smart contracts are built with the help of <strong>Solidity<\/strong> - a programming language that was specifically designed for developers working with the Ethereum network. These developers receive the criteria for a smart contract (for example, “if Sam pays me $10, I will send Sam the article”), and then create it by using Solidity. Essentially, a smart contract is basically an <strong>“IF something happens, THEN do this”<\/strong> function.<\/p>\n<p>When a smart contract is created, it needs to be deployed on the network. Once that happens, the contract becomes active, and the terms of the contract can be executed.<\/p>\n<p style=\"text-align: center;\"><img title=\"What are smart contracts: How do smart contracts work?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-4.o.jpg/" alt=\"What are smart contracts: How do smart contracts work?\" width=\"1000\" height=\"400\" \/><\/p>\n<p>As I’ve mentioned earlier, <strong>smart contracts work in an automatic manner<\/strong>. This means that, once they’re deployed, developers won’t need to add or change anything else - if the terms of the contract are met, it will perform its intended function.<\/p>\n<p>Furthermore, I would like to reiterate the fact that smart contracts are <strong>immutable<\/strong> - in other words, they can't be changed. This makes them secure and reliable, as long as the conditions by which they were deployed were checked and verified to be fair.<\/p>\n<p>That said, you might be wondering - WHY can’t smart contracts be tampered with? Specifically, how is this ensured?<\/p>\n<p>Well, this is thanks to blockchain technology. I won’t go too in-depth with the technical stuff on how that works, since it’s an entire section of its own, but in essence, in order to change the terms of a smart contract once it’s deployed, <strong>you’d need to be in command of at least 51% of the blockchain that the contract is based on<\/strong> - this is practically impossible.<\/p>\n<p>And also if you’d like to find out more about how <a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">blockchains work, make sure to check out the section on the topic.<\/p>\n<h2>What Can Smart Contracts Be Used for?<\/h2>\n<p>So - thus far, we’ve covered what smart contracts are, and also how they perform the processes that they do. As a final point, let’s take a look at some examples of what these pieces of technology can be used for.<\/p>\n<p>For starters, let’s say that you’re a farmer who wants to insure their crops, in case there’s a drought this year. The insurance company uses a smart contract for your insurance, with these terms:<\/p>\n<p><strong>“If the air temperature between the months A and B is above 90 degrees Fahrenheit for at least C amount of days, consecutively, pay out the farmer X amount of money.”<\/strong><\/p>\n<p>The insurance company would then make the smart contract track the local weather news platforms that have high reliability. Thus, the entire process would be automatized - <strong>if there was a drought that year, you would automatically receive your insurance payout!<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><img title=\"What are smart contracts: What are smart contracts used for?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-5.o.jpg/" alt=\"What are smart contracts: What are smart contracts used for?\" width=\"999\" height=\"368\" \/><\/strong><\/p>\n<p>And what's most important is that nobody ever will change the rules you, as the farmer, agreed to.<\/p>\n<p>Here’s another example - imagine that you want to receive a yearly bonus in your job, and are trying to negotiate it with your boss. Your boss lays down the requirements that you need to meet in order to receive that bonus and gives you a deadline. He also creates a smart contract that states:<\/p>\n<p><strong>“If A performs B, C, and D tasks until December 31st, 2022, A receives a bonus of X amount of money.”<\/strong><\/p>\n<p>In a situation like this, you know that you will DEFINITELY receive the bonus, if you meet all of the requirements by the end of the year - after all, once the smart contract is created, there’s no turning back! <em>And your crazy boss will never change his opinion just because of bad weather!<\/em><\/p>\n<p style=\"text-align: center;\"><em><img title=\"What are smart contracts: An example of using a smart contract.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//media//what-is-smart-contract-6.o.jpg/" alt=\"What are smart contracts: An example of using a smart contract.\" width=\"1000\" height=\"339\" \/><\/em><\/p>\n<p>These are just a couple of examples that illustrate the potential of smart contract technology. Truth be told, the opportunities for smart contract application are vast - this technology can be incorporated into a huge variety of different areas, and, frankly, <strong>smart contracts are making their way into the mainstream<\/strong>, as we speak!<\/p>\n<p>So, in this section, we’ve covered all of the essential information that you need to know about smart contracts - what they are, how they work, and the variety of different ways of how we can use them. If you would like to learn about various crypto topics - check out our section about <a href=https://www.bitdegree.org/"//crypto//learn//what-are-nfts/">NFTs.","youtube_video":{"id":7,"channel_id":1,"sort":91,"video_title":"What is a Smart Contract? (Explained with Animations)","description":"What is a Smart Contract?\n\nSmart contracts are automated agreements between two or more parties for something to happen. Essentially, they are blockchain-based lines of code that allow users to perform transactions without a middleman, or some sort of a third-party escrow service provider.\n\nApplication options for smart contracts are vast, and the use cases for this piece of blockchain technology are expanding every single day. If you want to learn about the awesome areas where smart contracts can be used, you\u2019ll find all of the relevant information in my video! I will also explain how smart contracts work, in the simplest way possible.\n\nWhat do you think smart contracts can be used for, as far as daily chores and activities go? Share your opinions in the comments below!\n\nVideo Time Table:\n\n00:00 Introduction to What Are Smart Contracts\n1:08 What Are Smart Contracts?\n2:51 What is the Core Purpose of Smart Contracts?\n5:40 How Do Smart Contracts Work?\n8:21 What Are Smart Contracts Used For?\n10:10 Wrap-up: What Are Smart Contracts?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#SmartContract #SmartContracts #WhatisaSmartContract #WhatAreSmartContracts #SmartContractsBlockchain #SmartContractsExplained","video_id":"0VCMtKx9AxU","duration":660,"view_count":1354,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-a-smart-contract-explained-with-animations.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-01-31T08:51:06.000000Z","created_at":"2022-02-21T13:20:28.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":3038,"uuid":"c656f803-c0c8-4c63-82ee-164ab8746adf","name":"what-are-smart-contracts.o.jpg","url":"https:\/\/assets.bitdegree.org\/crypto\/storage\/media\/what-are-smart-contracts.o.jpg","path":"crypto\/storage\/media\/what-are-smart-contracts.o.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":106437,"width":768,"height":478,"custom_properties":null,"created_at":"2023-06-19T06:58:36.000000Z","updated_at":"2023-06-19T06:58:36.000000Z"}}"
:chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming 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current-chapter="dapps-and-defi"
current-section="what-are-smart-contracts">