The concept of smart contracts didn't originally emerge in the context of blockchain, but was defined by computer scientist and expert cryptographer Nick Szabo in 1994 as a series of commitments inThe concept of smart contracts didn't originally emerge in the context of blockchain, but was defined by computer scientist and expert cryptographer Nick Szabo in 1994 as a series of commitments in

Akademi/Cryptocurrency Knowledge/DeFi/What are Smart Contracts?

What are Smart Contracts?

Jul 16, 2025

Paylaş

#Basic #DeFi #Beginners #Ethereum #Basic Concepts

The concept of smart contracts didn't originally emerge in the context of blockchain, but was defined by computer scientist and expert cryptographer Nick Szabo in 1994 as a series of commitments in digital form, including a set of protocols and the execution by the parties involved in the protocols.

However, it didn't gain much attention at that time until the birth of the decentralized, peer-to-peer transmission system of Bitcoin, and the emergence of programmable and immutable blockchain technology. These developments made the concept of smart contracts more than just a theoretical concept.

At the end of 2013, Vitalik Buterin released the Ethereum Whitepaper, and in subsequent years, he led the team in developing this decentralized smart contract application platform. It acts like an underlying operating system such as Apple's iOS or Android, providing a rich API interface for developers to quickly create various types of smart contracts and blockchain applications.

By now, the concept of smart contracts has become clearer: a smart contract is an immutable contract protocol written in code into a computer. When specific conditions agreed upon by the participants are met, the smart contract is executed.

1. Characteristics of Smart Contracts

In simple terms, a smart contract is a piece of computer program. It is not as intelligent as we might imagine, nor does it possess the legal enforceability of traditional contracts.

Deterministic: The result of executing the same smart contract is always consistent, even if it is executed on computers dispersed across different regions globally.

Open and Transparent: All terms and conditions within a smart contract are fully accessible and viewable by the participating parties.

Immutable: Once a contract is deployed, its contents cannot be altered. No party can interfere with the execution of the contract.

2. Lifecycle of Smart Contracts

Smart contracts are only executed when they are invoked by transactions. One contract can call another contract, and this calling can continue between contracts in layers. However, the execution of the first contract in this execution chain must be initiated by a transaction created by an external account. Smart contracts never run automatically or in the background. Without a triggering transaction, a contract remains in a state of waiting to be called.

The execution of transactions is a whole, and modifications to the global state will occur only after all executions have been confirmed successful. Confirmation of success means that the program's execution encountered no errors or termination conditions. If program execution terminates due to errors, all previous operations performed will be rolled back, as if that execution had never occurred.

3. Problems with Smart Contracts

As the use of smart contracts becomes increasingly widespread, people have also discovered that, much like contracts in the real world, if they are not carefully reviewed and verified, vulnerabilities can arise, leading to asset security concerns.

One of the most well-known incidents in Ethereum's history is TheDAO event. TheDAO was a decentralized autonomous fund project that raised over $150 million worth of Ether in just one month. However, within a month, a vulnerability in the token code led to a significant amount of funds being transferred out by hackers. Due to the immutable nature of smart contracts, the project team was powerless to intervene.

Even today, contract vulnerabilities continue to occur. However, these hacking incidents have made more developers realize that, just like contracts in the real world, if protocol processes are too complex, involving professional third-party audits is necessary.

4. Summary

Smart contracts replace third-party intermediaries with open, transparent, and immutable protocol codes, reducing trust costs for contract participants. They have a wide range of applications and prospects. While challenges in security auditing persist, it's important to recognize that the field is less than a decade old. Smart contract development is still in its early stages, and we believe wider market acceptance of smart contracts is only a matter of time.

Piyasa Fırsatı

Smart Blockchain Fiyatı(SMART)

$0.004881

$0.004881$0.004881

-1.59%

USD

Smart Blockchain (SMART) Canlı Fiyat Grafiği

Popüler Makaleler

Solana Phone 2 Seeker Airdrop Guide: How to Claim SKR Token Complete Tutorial

1. SKR Token Airdrop Now Live: Essential Information for Seeker UsersSolana Mobile has officially announced that the highly anticipated SKR Token airdrop will open for claiming on January 21, 2026, at

2026/01/20

Why Is Meta Stock Down? Key Reasons Behind the Drop ( 2026)

Meta Platforms (META) has faced selling pressure in early 2026, leaving many investors asking: Why is Meta stock down? Despite strong fundamental growth, a combination of rising costs, sector rotation

2026/01/19

Spot Trading vs. Futures Trading: A Beginner's Guide to Determining Which is Right for You

As the cryptocurrency market continues to mature, the diversification of trading tools has become a key factor in building robust investment strategies. Among global mainstream crypto exchanges, MEXC

2026/01/19

How to Trade Futures on MEXC App: Complete Beginner's Guide

MEXC Futures trading offers MEXCers an advanced way to trade cryptocurrencies. Unlike Spot trading, Futures trading has its own unique logic and order-opening mechanisms. This article is designed to h

2026/01/19

Popüler Haberler

Daha Fazla Göster

Glassnode Sees Bitcoin Stabilizing Under $93K as Smart Money Quietly Rebuilds

Bitcoin’s price slipping below $93,000 may look bearish at first glance. But under the hood, market structure is quietly improving. According to Glassnode, internal

2026/01/20

DeFi Protocol MakinaFi Suffers Devastating $4.1M Ethereum Hack, Funds Drained

BitcoinWorld DeFi Protocol MakinaFi Suffers Devastating $4.1M Ethereum Hack, Funds Drained In a stark reminder of the persistent security challenges facing decentralized

2026/01/20

Solana (SOL) PropAMMs Explained – How They Beat Traditional DEX Liquidity

The post Solana (SOL) PropAMMs Explained – How They Beat Traditional DEX Liquidity appeared on BitcoinEthereumNews.com. James Ding Jan 19, 2026 22:40 Proprietary

2026/01/20

Spot vs Futures on Binance: Where Should Smart Money Actually Trade?

Spot vs Futures on Binance - Where Should Smart Money Actually Trade? Smart money doesn’t chase hype — it chooses structure, liquidity, and asymmetric risk

2026/01/20

İlgili Makaleler

Spot Trading vs. Futures Trading: A Beginner's Guide to Determining Which is Right for You

As the cryptocurrency market continues to mature, the diversification of trading tools has become a key factor in building robust investment strategies. Among global mainstream crypto exchanges, MEXC

2026/01/19

How to Trade Futures on MEXC App: Complete Beginner's Guide

2026/01/19

Crypto Futures Trading for Beginners: Complete Guide & Strategies

In this article, you will use MEXC Learn to explore the fundamentals of futures trading. This simple guide will help you easily understand the derivatives market and learn about the Futures trading pr

2026/01/19

KYC Uncovered: The Key to Crypto Trading and Finance

1. AbstractKYC (Know Your Customer) is a globally recognized compliance procedure in the financial industry, designed to verify customer identities, understand their financial behavior, and prevent il

2026/01/19

Hemen Hesap Açın ve 10.000 USDT'ye Kadar Bonus Kazanın