Smart Contract Blockchain Explained
Let’s initiate from basic: ICO
ICO is nothing but a fundraising way in which new projects sell crypto token by exchanging Bitcoin and ether. Crypto token is used for the term referring unit value that a company issues or raises. The unit issued is used for rewarding the users participating in the assignment and do the actions assigned. This token can also be used as money to get some specific task to be done on network.
These tokens are purchased in exchange of USD or by doing some specific tasks like mining on the network. The best part about the tokens is that their value appreciates and depreciates depending upon their demand. This is the same as in case of share in companies. These tokens act as money payable for services and equity.
With the increase in network of token, the value of token starts appreciating. The value of token for your project can be determined from the fact that what is the objective of project and in what way it can be tokenized. These tokens not just act as currency but indeed they are the foundation units on which the network runs.
What is the importance of token for your project?
It is mandatory that the project should have following properties so that the tokens can hold some importance
- There should be some usefulness value to the token in network. For example ether is token of ethereum. Thus ether is used as currency which can be used to make payment for tasks performed in ethereum blockchain.
- It is necessary that there should be some incentive for players in order to purchase tokens. The insurance policy of the token should be framed in such a way that their value increases with the usage. Let’s say like filecoin is token for IPFS. This token is used to save files in hard drive network. It is necessary to have file coin token so that the files are stored in distributed manner.
With the help of ERC20 new crypto tokens can be issued. It demonstrates the events that Smart Contracts ethereum token has to do. To learn how to issue token for the project it is necessary to know what smart contract is.
What are smart contracts?
blockchain Smart Contracts allow the automatic transfer of digital assets in between parties which depend upon their pre specified conditions. These smart contracts are primarily used in connection with cryptocurrencies. The best example of this is decentralized applications or dApps. In general only applications run by centralized organization are used. These applications are controlled by one entity. Just like facebook is one application controlled by entity Facebook Inc. There are decentralised apps which are not run by single entity. They are run by certain set of protocols within them. These are open for all and anyone can host their own dApp.
What are the platforms for writing smart contracts?
Ethereum is the best platform for writing smart contracts. The other platforms include script in bitcoin, automated transactions, NXT and chain.
Limitation associated with smart contracts
Since these smart contracts are quite new and have not evolved completely they are not capable of replacing any form of contracts.
- Smart contracts are not much useful legal contracts. In such issues there are no objective facts and the main reason for dispute is judgement from both the parties.
- The next limitation of smart contract is that it depends upon on “if a, then b” variation. No any other variation can be included in this.
- If a smart contract makes call to some web service then there can be multiple executions of same contracts. The solution for this is oracles.
Present languages and upcoming languages for smart contracts
Serpent and Solidity are the two basic languages to write Smart Contracts Ethereum.
- Serpent being the older language became outdated from September 2017.
- Solidity as of now is the most used language for smart contracts. Some of the upcoming languages for smart contracts are viper, lisk and chain.
Deployment of smart contract in ethereum blockchain
Once the smart contracts are written it is important to deploy and test whether they are working as expected. Here the testnets come to help.
Testnets: A replication of ethereum network
Testnets replicate the ethereum network and EVM. With this the developers can upload and interact with smart contracts and they need not to pay cost of gas.
What is etherscan and how to explore smart contracts?
Etherscan acts as block explorer for ethereum blockchain. In block explorer user can search and confirm transactions that have taken place.
Today issuing token has become very popular to provide your product. It can further increase the participation of users. So as results smart contracts have become a lot more important. The overall concept of smart contracts can help in issuing of token easily.