What Are Smart Contracts?

Smart contracts, also known as crypto-contracts, are digital, self-executing contracts that help verify a transaction’s credibility without the involvement of third parties. They are typically used to automatically execute the terms of an agreement so that all participants can be immediately sure of the outcome. In this sense, they specify the rules and behavior for transferring digital assets. 

Smart contracts offer the following benefits:

They’re fast, accurate, and efficient: Contracts are immediately executed once conditions are met. Since they are digital and automated, there’s no paperwork to process and no time spent fixing mistakes that can occur when manually filling in documents.

They instill trust and transparency: Since third parties are not involved and participants share encrypted transactions, participants don’t have to worry if information has been altered for personal benefit.

They’re secure: Blockchain transaction records are encrypted, so they are difficult to hack and cannot be changed or altered in any way. Because each record connects to previous and ensuing records on a distributed ledger, hackers would have to alter the entire chain to change a single record.

They're cost-effective: By eliminating third parties, companies lower transaction costs. In industries like real estate and lending, cutting out pricey third-party fees can lower costs significantly.

Smart contracts are becoming increasingly attractive to businesses looking to enhance transaction security. Smart contracts can automate many processes, which saves time and money. In addition, smart contracts are based on secure and tamper-proof blockchain technology, making them ideal for businesses that need to store and manage sensitive data. 

What Is Solidity?

Solidity is an object-oriented, high-level programming language developed specifically for creating and implementing smart contracts on various blockchain development platforms, particularly Ethereum. Initially developed in 2014, Solidity has attracted the attention of businesses who want to switch from traditional to “smart” contracts. 

At their most basic, Solidity smart contracts enable highly secure digital transactions that don’t involve third parties. Smart contracts are baked into blockchain technology, making them traceable, transparent, irreversible, and immediate. An estimated 90% of the world’s smart contract development is done with Solidity.

Solidity is the primary programming language for developing smart contracts on the Ethereum blockchain, the second-most popular blockchain. Since it’s open source, anyone can use Ethereum, making it the platform of choice for creating and implementing smart contracts.