Hello friends, in today’s article we discuss Ethereum and Smart Contracts Explain. After reading this you get the good and bad things about Ethereum and Smart contracts.
Ethereum and Smart Contracts:-
Just like Bitcoin technology saves the Bitcoin transaction, the Ethereum network save the ether transactions.
On the Ethereum blockchain save currency Transactions as well as smart contracts are also saved.
Smart contracts is a small computer programs, that do any computer work, as instructions given in the program for specific work given by smart contracts.
Those instructions are called a computer program.
How does it work?
- Create a smart contract ( means computer program )
- Upload them to start a contract at a specific address on the Ethereum blockchain. they do nothing seat there.
- Then send the ether to that address to activate and run the smart contract. ( ether is the Ethereum network currency name )
When ether came to the smart contract address, the smart contract gets activated and does the work that they build for.
It’s like a coin machine, when you put a coin in the machine, the machine works and shows weight, or gives a Coca-cola drink. without any dollar coin, this machine doesn’t work, they stay silent.
Example of Smart Contracts:-
- Gambling Smart Contract:- Everybody can send their bets and Rs. 100 each to the smart contract. The result of the match, with a sports channel, the winner gets all, and others get nothing.
- Insurance Smart Contract:- Farmer sends Rs.1,000 and the insurer sends Rs. 10,000 to the smart contract. Smart Contract checks temperature throughout the winter. If the temperature goes below,5 crops are damaged, and farmers get paid.
Up to now, we know, on the Bitcoin Blockchain, we store the Bitcoin transaction and in the Ethereum blockchain, we store ether transactions as well as the smart contracts.
The Excitement about smart contracts is that they eliminate the Middle man.
- As per your requirement, you can add the information on smart contact they work like that.
- Smart Contract is an open source, you can check the source code.
Decentralized Apps ( DApps):-
A group of smart contracts that interact with each other is called Decentralized Apps.
Every app is available on the internet, each app can be decentralised with the help of a smart contract.
e.g. youtube, twitter, instagram.
e.g. Making youtube without youtube company
In youtube DApps, In smart contracts, advertisers can bid for ads, and those who have higher bid prices get the ads.
Other Smart contracts give the money to create on the basis of views.
Third smart contract checks for copyright.
Fourthdo other work, fifth do other work.
This means you make youtube without a youtube company. This means Deleting the Middleman because everything goes automatically.
This same thing we can do for Uber, Twitter,
This contract develops to remove the middle man because This middle man always changes their policy on their demand.
That’s why users and developers face the loss. But also this middle man has good things as well, Like the youtube modulator, deleting the wrong content creator.
Same thing Amazon do with the wrong seller.
DApps can do bad things too.
Suppose, an earthquake happens and people leave the place by booking an Uber car through the app.
By seeing more demand than supply, The DApps Uber increase the ride price, so people can’t afford that price. Because of middle man free DApp. don’t have any emotion.
They do work as they develop for they can’t decide right or wrong. just like the app can be decentralised, just like the whole organization can be decentralised.
Decentralized Autonomous Organization ( DAO):-
The company can by smart contracts called DAO.
E.g. THE DAO
The company is a Venture Capital fund. Establish in 2016. work like Investor sends money and they get the token.
By using that token, they can vote on which start is good for venture capital. to get more profit.
On the basis of voting, the DAO invest their money in start-ups. This all things work automatically.
so people send money to the DAO ( company ) But the DAO Smart Contract, Had many bugs. Bugs mean problems or loopholes.
that can be used to do wrong. One hacker uses these bugs and robe up to 3 million ether. their value is $50 million.
The shocking news is that the DAO is doing the work they build for.
After the robbery, so many arguments happen some people say the DAO do the things that they build for.
Money is gone so gone. code is the law.
Opposite people say blockchain is made for people, not people made for blockchain. so this robbery is wrong, and all money must be returned.
Lastly, the Ethereum blockchain is divided into two parts and most people ask for return money and says update the Ethereum chain and invalidate the hacker chain transaction.
The Ethereum says about himself is that I am an unstoppable, censorship-resistant, self-sustainable and decentralized world computer.
but, they get stopped, they get censorship. It’s only because a few important people lose lots of money by smart contracts.
Smart contracts work the same as they build for upon this event we know that Bitcoin is centralized same as Ethereum is also centralized.
Ethereum thinking is far way beyond because a smart contract is very useful in future.
But have some problems.
Problems with Ethereum:-
- neither smart no contract:- Because smart is not if in a real-life situation comes like, that not included in the smart contract. Smart contracts don’t do anything. e.g. In gambling, the match gets postponed something happens that people. don’t think when a smart contract is developed. Contracts are not because these things are not legal. courts only allow legal or real contracts. If something happens between two parties of a contract, so courts don’t treat that contract as a legal contract.
- Bugs in language, bugs in coding:- To write a smart contract, solidity language is used, this language has bugs and also making, a smart contract by developing code, may have bugs. just like we see in the DAO company. The hacker can get benefited himself. with this contract.
- Smart Contracts can do bad things:- Smart contracts don’t have right or wrong thing decisions about what is human or what is not, without seeing that smart contract do their work.
- Rules can be broken for important people
- Scalability problem ( just like Bitcoin)
Ethereum can be used in initial coin offerings to create tokens.