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Cover image for Ethereum Blockchain: developing smart contracts

Ethereum Blockchain: developing smart contracts

dianamaltseva8 profile image Diana Maltseva ・2 min read

Blockchain technology

Blockchain is a trusted distributed ledger that maintains a continuously growing number of transactions and data records.

In fact, it is an innovative technology of decentralized data storage providing a high-security level and enables data manipulation occurred according to certain rules.

This confidence is ensured by the fact that data array is stored at once for each Blockchain participant, meaning that it won’t be enough to simply replace the entire array in one place.

And each subsequent piece of data, a so-called block, contains a hash of the previous block, providing the following benefits:

  • It’s impossible to substitute an intermediate block in the finished chain;
    A block can’t be changed without changing its hash, therefore it is impossible to make it without breaking the chain integrity.

  • Having great perspectives for a plenty of industries, Blockchain provides various abilities for developers. For instance, an Ethereum Blockchain platform, serving as an extension to Blockchain and enabling smart contracts.

Ethereum Smart Contracts

Smart contracts are programs with contract clauses, determined by the parties and written into the lines of code.

While each network participant has access to all the data, they automatically trace agreements’ completion and remove any intermediaries.

In fact, an Ethereum smart contract represents an ordinary contract, but the fixing goes not legally, but technically. So, there is no need for a notary or any other authorized administrator, recognized by both parties.

In Blockchain, smart contracts are responsible for data manipulation. Each smart contract has a small database and provides methods for changing its data.

Since contracts are replicated across all nodes, their databases also are. Every time a user calls a method from a contract, thus changing the data, this command is replicated and repeated by the entire network. This process enables to create a distributed consensus to fulfill agreements.

Noteworthy that Ethereum smart contracts describe what data to store in the ledger as well as a set of functions for performing operations on these data.

Functions’ execution is carried out through the interface, provided by each contract and generated from the source code separately from the compilation. Also, the interface allows executing of the binary code.

Data changes occur via transactions, each transaction has the following structure:

  • Transaction sender;
  • Transaction recipient;
  • The amount of sending currency;
  • Price per gas unit;
  • Gas limit per transaction;
  • Arbitrary data (optional).

 
Learn more about Ethereum network and Smart Contract development.

Also, find out how to create a Hello, World smart contract.

 

Discussion

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mynameisfashanu profile image
Fashanu Willies

An awesome breakdown on Ethereum and smart contracts. It was a very informative read!
If I'm not mistaken that would mean Ethereum is essentially a distributed supercomputer that can be programmed, with the added benefit of having a cryptocurrency?

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dianamaltseva8 profile image
Diana Maltseva Author

Thank you for your feedback) Ethereum is a Blockchain-based platform that provides tools for creating smart contracts and decentralized applications.

Also, it has its own cryptocurrency called Ether, that can be transferred between accounts, traded on digital currency exchanges, and used to make payments for transaction fees and compensation of participant nodes for completed computations.

What’s more, third-party developers have the ability to build their own applications that live on the network and can charge ETH to generate income.

Noteworthy, that Ethereum is the most famous and successful ICO (Initial Coin Offering, a new fundraising tool for cryptocurrency startups) project, introduced by Vitalik Buterin.