Learn what smart contracts really are in this video.
Transcript Below:
Hi there!
My name is Dani and I’m the founder of the simplest crypto dictionary beginner’s guide.
In this video series, I’m going to introduce the basic concepts surrounding cryptocurrency. We’re going to touch on:
– 13 very important and very common words you need to know
– Then I’m going to bring up 5 common categories of cryptocurrency
– And finally, the 8 crypto resources you need to be using right now
Before I go on, here’s a quick disclaimer: Nothing published by me or Decryptionary constitutes investment advice. Always do your own research before making an investment.
Next up we have smart contracts. A smart contract mixes blockchain technology with contracts to make a more efficient and affordable system of doing business.
In a smart contract, two people doing business agree to exchange money for something else. if the requirements set by both parties of the contract are met on a date, it activates, delivering what was purchased. If the requirements are not met, the contract deactivates and returns whatever it was storing.
For example, Alice wants 1 bitcoin from Bob and Bob wants $10,000. Both Bob and Alice agree that on January 1, 2018, both the bitcoin and cash will be deposited to the accounts linked with the smart contract.
On January 1st, the contract looks to see if both people fulfilled their obligations. If so, it will release the payment and bitcoin to their new owners. If not, the bitcoin and money are returned to their original owners.
Because the contract is publicly available and unalterable, it is very easy to keep both Bob and Alice responsible for their end of the deal. If anyone somehow violates the agreement, the proof of what they should have done is easily obtained
