What Are Smart Contracts And How It IS Related To Trading - Espay Exchange

2. Introduction N. Ameria • Do you know what smart contracts are? If yes, you might know how it is being used in major sectors like Finance, Healthcare, Real Estate, Automobile, Supply Chain, and Management. Even the Government is planning to use it for elections. • But it was first introduced in the crypto market. Do you know the technology behind crypto trading? The main technology is blockchain. But nowadays, trading platforms are using smart contracts to facilitate crypto trade. • White label cryptocurrency exchange uses smart contracts to facilitate crypto trade. Do you know how ICO tokens are created and sold? It is done by using smart contracts. It is safe to say that smart contracts have become a very important part of the crypto market and crypto trading. • Many people still don’t have any idea about smart contracts. So in this post, we are going to help you understand what exactly smart contracts are. We are also going to discuss how it is reacted to trading in the crypto market.

3. Smart Contracts N. Ameria • In technical terms, it is a computer protocol. This protocol works like a contract. It is like a digital contract. Do you know how a contract works? In a contract, two parties agree to certain terms and conditions. Once these conditions are met, the contract is executed. • Similarly, a smart contract is a computer program which works on the blockchain. Here the terms and conditions are written in codes. When the terms and conditions are fulfilled by both parties, the contract gets executed on its own. Once the contract is executed, it is updated across the blockchain network. • The idea was coined by Nick Szabo. He was a cryptographer. In 1994, he taught of using computer codes to write contracts and make it digital. However, it took 21 years for this idea to be implemented. In 2015, the first smart contract was developed. It was done by Vitalik Buterin. He is the founder of Ethereum. • A smart contract basically can be understood with the help of these three terms. • Agreement: It is an agreement between two parties. The agreement is in the form of a written code. It runs on the blockchain. These codes are stored in a public ledger, which everybody can see but cannot be changed. • Processing: The blockchain network processes the transaction agreement. There is no third party or mediator involved. • Execution: Once the conditions of the contract are met, it gets executed automatically. There is no one to stop or intervene. • If you still have doubts about smart contracts, this example will help you.

4. Example You have conducted an ICO. The smart contract is made on Ethereum Blockchain. The smart contract will contain an agreement between you and the investors. Suppose you have 100,000 Tokens. Now, you want to raise 1,000,000 Ether, so you need to sell one token for 10 Ether. Now, you need to create a smart contract which will help you to transfer 1 Token for 10 Ether. The smart contract will look like, “WHEN the investor pays 10 Ether to you, THEN he will get ownership of 1 token.” As per the smart contract, when you receive 10 Ether from an investor, he will automatically receive one token. You don’t need to go to any lawyer to create an agreement. With smart contracts, you can develop your own contract. The mechanism behind smart contracts is simple. Once the terms and conditions of the contracts are met, it gets executed. N. Ameria Smart Contracts and Crypto Trading Nowadays, people are starting to use smart contracts for every sector and industry. But smart contracts are mostly used in the crypto world. Most of the white label crypto exchange software is developed using the smart contract and blockchain technology. After blockchain technology, it is the second most adopted technology. Here, we will show you how smart contracts are related to crypto trading. Crowdfunding: We all are aware of the crypto crowdfunding technique. If you want to raise money for your business, the simplest way to so is by using crypto crowdfunding techniques like ICO, IEO, and STO. To do this, you need to smart contracts. You can start your own project using the blockchain technology. Now in order to raise funds, you need to choose a blockchain platform. Let’s assume you are raising the money through the Ethereum Platform. So first, you need to create a token and then a smart contract to sell the token to raise money.

5. Now, let’s say you want to raise $1,000,000 for your project. The value of 1 Ether is $1000. So you need 1000 Ether for your project. Now, if you sell 10,000 tokens, you need to sell one toke for 0.1 Ether in order to raise 1000 Ether. 10,000 X 0.1 = 1000 Ether The smart contract will be written as, “IF 0.1 ETH is transferred to the company’s address, THEN 1 token will be sent to the investor’s address who sent 0.1 ETH.”. N. Ameria Cryptocurrency Value Smart contracts not only facilitate transactions but also helps to provide value to cryptocurrencies. It will help to attract more people towards crypto trading. People are so used to fiat currency that they seldom appreciate cryptocurrency. People are risk-averse and tend to stay away from crypto trading. But smart contracts are changing that. It is a bridge. New businesses are moving towards cryptocurrency because of smart contracts. As well, all know cryptocurrency has many applications. The fact that smart contracts are created on the blockchain, it can only accept cryptocurrency. If you want to use smart contracts, you need to use cryptocurrency as the payment medium. It does not work for fiat currency. Because of this, many sectors, industries, and companies have started using cryptocurrency. Nowadays, cryptocurrencies are used as payment options in many business applications. People have become more liberal towards crypto. Many people have started investing and trading in crypto because of this.

6. Crypto Trading When you use a decentralized platform for crypto trading, you can easily trade using the P2P trading service provided by them. For centralized trading development of smart contracts are not used. It only uses blockchain technology and is regulated. But decentralized platforms are different than centralized trading platforms. They use smart contracts to manage the transactions. As there is no authority, all the trading and transactions take place due to smart contacts. You can directly enter into transactions with other people on this platform. Instead of keeping the funds with the exchanges, you can handle your own funds. You can operate these funds; however, you want without any interference. Binance is one of the most famous examples that adopted a decentralized platform. The main technology behind decentralized platform is smart contracts. Here are the advantages. • It is more secure • Lesser risk of manipulation • Independent • No regulators • Accessibility N. Ameria

7. Ethereum After Bitcoin, Ethereum is the second-largest cryptocurrency. The coin is known as Ether. It works as a coin as well as a platform from developing tokens. Many ICO’s are conducted using this platform. It was launched in 2015. They use smart contracts which run on the blockchain technology. The first smart contract was developed by Ethereum. It also helps to develop decentralized applications that are known as DApps. These apps work on smart contracts. Ethereum is a pioneer in smart contract development. If you want to raise an ICO, you can do it using this platform. Now, may other platforms are using the same technology. Smart Contracts Development Platforms: • Ethereum • NEM • Stellar • Waves N. Ameria

8. Cryptocurrencies which can work on smart contracts: • Ethereum • EOS • Cardano • Tezos • TRON • NEO • Ethereum Classic This is all you need to know about smart contracts. Smart contracts play a major role in the crypto world. After blockchain, smart contracts are going to change how the crypto world, as well as other industries, function. People are in favour of smart contracts because it is safe, accurate, speed, trustworthy, affordable and maintains privacy. If you want to develop a smart contract for your business, you can approach a smart contract development company. There are many reliable companies who offer this service. N. Ameria

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