$BNB
Details of Smart Contracts:
Definition: A smart contract is a program stored on a blockchain that automatically executes, controls, or documents legally relevant events based on predefined conditions. If the conditions are met, the contract executes itself; if not, it doesn’t.
How They Work: Written in languages like Solidity, smart contracts are deployed on a blockchain. Once triggered by an event (e.g., payment receipt), they execute actions like transferring assets or updating records, with outcomes recorded immutably.
Key Features:
Automation: Eliminates manual intervention, reducing errors and costs.
Transparency: Code and execution are visible on the blockchain.
Security: Cryptographic protection ensures tamper-proof execution.
Trustlessness: Parties don’t need to trust each other; the code enforces agreement.
Applications: Used in decentralized finance (DeFi) for loans, insurance claims, supply chain tracking, and even digital identity verification.
Limitations: Bugs in code can lead to vulnerabilities (e.g., the 2016 DAO hack), and they lack flexibility for complex legal disputes. Scalability and gas fees (transaction costs) also pose challenges.
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