A smart contract is basically a piece of a computer program that can execute a contractual agreement between two parties. A smart contract in a blockchain is executed autonomously in a decentralized way. Hence, no central authority is involved to regulate the transactions and smart contracts. Smart contracts can be executed for any constraints, agreements, conditions, or functions.
Most of the crypto projects are integrating smart contracts in their blockchain. This allows the transaction in the blockchain through a smart contract. This means the transfer of cryptos between the parties is in mutual agreement through a smart contract of the blockchain.
The most popular use of the smart contract is NFTs or Non-Fungible Tokens. NFTs tokens can be traded through smart contracts between the buying and selling parties. Both the party agrees mutually for the trade via smart contract of the blockchain. So, if the smart contract states that if anyone pays 10000 dollars for the particular NFT, then the NFT is automatically transferred to that person. This means if the conditions of the smart contract are fulfilled then trade happens between the parties. These small contracts are self-executed without the control of the central authority. Hence, transactions are faster through the smart contracts of the blockchain.
With the help of smart contracts, it is now possible to set up a percentage of royalties that the artist wants to be paid every time the NFT is sold. So, basically, an artist can be awarded a certain percentage of sales of his art through smart contracts. And the royalty payment can be coded in the smart contracts in the NFT smart contracts. Smart contracts are immutable that means agreements in the contract cannot be changed or altered. Hence, making the transactions more secure. NFTs can be traded in the NFT marketplaces like OpenSea.
The possibilities of smart contracts are really endless and it is really exciting to see how smart contracts and NFTs are changing the digital art world. Many blockchain projects have included smart contracts and this digital movement can change the world.
So, this was the post regarding smart contracts in blockchain and cryptocurrency trading. For any queries or suggestions, kindly contact us. Also, you can motivate us in the reply section below.
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