Introduction to Smart Contracts

1. What are Smart Contracts?

Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They run on a blockchain, allowing for automated and secure transactions without the need for intermediaries.

2. How Smart Contracts Work

Smart contracts operate on blockchain networks such as Ethereum. They are triggered by specific conditions being met, leading to automated actions.

Basic Workflow

graph TD;
    A[Start] --> B{Conditions};
    B -- Yes --> C[Execute Contract];
    B -- No --> D[Wait for Conditions];
        

3. Benefits and Challenges

Benefits

• Increased Efficiency
• Cost Reduction
• Enhanced Security
• Transparency

Challenges

• Code Vulnerabilities
• Legal and Regulatory Issues
• Scalability Concerns

4. Code Example

Here is a simple example of a smart contract written in Solidity:

pragma solidity ^0.8.0;

contract SimpleStorage {
    uint256 private data;

    function setData(uint256 _data) public {
        data = _data;
    }

    function getData() public view returns (uint256) {
        return data;
    }
}
            

5. FAQ