ethereum blockchain | The Capital

Smart contracts are the key element of Ethereum. Basically, smart contracts are just like contracts in the real world. The only difference is that they are completely digital. In fact, it is a piece of software that contains rules and regulations for negotiating the terms of a contract. Smart contracts can be stored on a blockchain, interact with external data feeds and then self-execute payments, shipments of products or other actions based on conditional logic (programmed as traditional “if-then” statements — if A occurs, then B happens), agreed verifiable proof of performance, or other trigger events. The best way to understand smart contracts is just to think of it as program functions: there are inputs, logic to process the inputs, and output. The execution of smart contracts often results in updated states.

The contracts are built with Solidity — a language for writing smart contracts, similar to Javascript, as well as other frameworks and tools. Smart Contract owners can create their own arbitrary rules for transaction formats, functions, and ownership.

The Ethereum Virtual Machine (EVM) is a place where smart contracts run in Ethereum blockchain. Ethereum provides network members with access to the EVM — where developers can build smart contracts, these contract codes can be of many forms, such as the transaction of money when certain conditions are met or the exchange of goods between parties and embed them into the application.

Once the code is written, it is uploaded on the EVM- Ethereum Virtual Machine, which you can say is a universal runtime compiler or browser to execute the smart contract’s code. Because it’s decentralized, the execution doesn’t really take place on one device.