As of recent reports, more than 61 million smart contracts have been deployed on Ethereum – making it the largest blockchain.
Ethereum is a decentralized, open-source blockchain-based software platform used for sending and receiving its native growing cryptocurrency, ether, without any third-party interference. However, when smart contracts are used to buy, sell and swap Ethereum, it can open many opportunities.
According to Etherscan statistics, the smart contract address has become one of the largest holders of Ethereum out of all other wallets. It now holds more than 7.4 million ether worth over $29.3 billion.
The following article describes the different ways you can use a smart contract to buy, sell, or even swap Ethereum.
What are Smart Contracts in Ethereum?
Smart contracts are code-based programs stored on the Ethereum blockchain. These contracts are automatically carried out when certain predetermined conditions are met. They are used to automate the execution of an agreement without any third-party involvement, avoiding any money or time loss.
What is Ethereum?
There are so many digital cryptocurrencies that it’s hard to keep track of nowadays. Ethereum is one such cryptocurrency that is considered the second largest and the largest altcoin. It is more than just a crypto token and is recognized outside the crypto community.
This is particularly true for its innovative blockchain solutions and advanced features. The cryptocurrency operates through an open-source blockchain that has smart contract functionality. Moreover, these smart contracts are primarily applied in decentralized finance also known as DeFi.
Factors that have put Ethereum at the forefront of cryptocurrency:
- Unique model
- Solutions for scalability
- Comprehensive market strategy
- Leadership in decentralized applications
- It is also easily programmable
The token can also be used as payment for tangible goods as long as they are an accepted form of payment.
Now, Ethereum’s use cases are diverse in which DeFi falls, another one is smart contracts.
Real-Life Use of Smart Contracts
The following example should help clarify the use case of smart contracts in buying, selling, or swapping Ethereum.
Think of a contract between a tenant and the landlord. In the traditional form, the terms and conditions of the property (rental or purchased) would be mentioned clearly. These terms bind both parties to the contract and there might be a condition where the tenant must pay the rent or the installment of the purchase amount on the third day of each month.
If the landlord fails to receive a payment, they usually get in contact with their legal professional and enforce the agreement. Enforcing a penalty on the tenant through the traditional contract with the legal professional in between would take days.
Now, if the landlord and the tenant were to engage in the exchange of real estate through smart contracts, the process would be quicker. This would automatically transfer the funds and take care of legal compliance.
The entire process would also become time- and cost-efficient.
Warning:
When developing smart contracts be sure to check the calculations to avoid indefinite locking or loss of funds.
Benefits of Smart Contracts to Buy, Sell, And Swap Ethereum
Speed
Once all the conditions are met, the contract is executed immediately. Since the contracts work on software codes that are active on the internet, transactions are executed quickly. As a result, smart contracts can save many hours from the traditional business process.
Accuracy
Whenever a smart contract is executed, all the terms and conditions are recorded in explicit detail. Since there is no human intervention during the whole execution process, the transaction is error-free.
Efficiency
Efficiency is the natural by-product of speed and accuracy when you buy or sell Ethereum. It also signifies that the operating cost of the whole transaction is less than the existing substitutes. Furthermore, the problem-solving in the transaction is more efficient than the traditional channels.
Transparency
If you are buying smart contracts in Ethereum, the terms and conditions of the contracts are fully accessible to all the stakeholders. Furthermore, once the contract is established, there is no way to dispute them. This process facilitates absolute transparency to all concerned parties.
Trust
Ethereum smart contracts generate total confidence in their execution because of the involvement of any third party. No one can alter any information for their benefit.
The contracts are transparent, autonomous, and secure. It removes any likelihood of manipulation, bias, or error. Furthermore, once solemnized, the network automatically executes the contract.
Security
Encryptions at the blockchain level apply when you buy, sell, and swap Ethereum through smart contracts. As a result, blockchain transactions are tough to hack. Hackers must modify the whole chain to change a single record as each record links to the previous and subsequent records on a distributed ledger.
Clear Communication
There can be no miscommunication or misinterpretation while framing a contract. A smart contract in Ethereum eliminates the room for inefficiency due to communication gaps.
Paper Free
As organizations are becoming eco-sustainable, they have become increasingly conscious about their impact on the environment. Smart contracts remove the need for vast reams of paper since they live and breathe in the virtual world. These contracts facilitate the go-green movement.
Storage and Backup
Every time a transaction is made, these contracts record essential details. These details in the contracts are easily retrievable whenever needed. Therefore, any points in the smart contract are permanently stored for future records.
Savings
Smart contracts eliminate the need for intermediaries to handle transactions. These are automated transactions that require no lawyers, bankers, etc. The entire process reduces the associated time delays and fees during the transaction.
Reduction in Litigation and Courts
Buying or selling Ethereum through smart contracts reduces the need for litigation and courts. The stakeholders can commit themselves to rules and determinations of the underlying code.
Flexibility
Smart contracts are flexible to be used across industries. In addition, they can be streamlined and automated to conduct business down the street or around the world.
Smart Contracts in Ethereum bring many benefits to the process, making a difference in how transactions are carried out. These advantages make them a credible instrument for buying, selling, or swapping Ethereum, giving investors complete confidence.
Bonus reads: 5 Reasons Why Bitcoin Still Holds An Edge Over Other Cryptocurrencies
Wrapping It Up!
That was all about using smart contracts in Ethereum and other real-life incidences such as buying or renting real estate. The article also discusses the various benefits of smart contracts and how Ethereum is running at the forefront of the race of cryptocurrencies.
It is important that you keep an important thing in mind – check the calculations as it can affect the funds. You do not want to lose funds due to a minor mathematical fault such as incorrect decimal handling.
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