Smart Contracts

What are Smart Contracts?

Smart Contracts are self-executing contracts with the terms of the agreement between buyer and seller directly written into lines of code. They automatically enforce and execute the terms of a contract when predefined conditions are met. Originating on the Ethereum blockchain, they have become a foundational technology in (DeFi) and blockchain applications.

Key Elements

  1. Automated Execution: Triggered automatically when predefined conditions are met.
  2. Decentralized Nature: Operate on a blockchain, reducing reliance on intermediaries.
  3. Immutable and Transparent: Once deployed, they cannot be altered, ensuring integrity and transparency.
  4. Mechanisms: Ensure agreement on the state of the blockchain. Ethereum initially used (PoW), transitioning to Proof of Stake (PoS). NEO uses a delegated Byzantine Fault Tolerance (dBFT) mechanism.
  5. State Machine: The blockchain acts as a state machine, with smart contracts transitioning it from one state to another based on transaction inputs.

Ethereum and NEO as Pioneers

  • Ethereum: Introduced the concept of a programmable blockchain, enabling complex smart contracts.
  • NEO: Focused on creating a smart economy with digital assets, digital identity, and smart contracts. Known for its unique consensus mechanism and support for multiple programming languages.

NEO Smart Contracts

  • Language Flexibility: Unlike Ethereum, which primarily uses Solidity, NEO supports multiple programming languages, broadening accessibility for developers.
  • Digital Assets and Identity: Focuses on digitizing assets and integrating digital identities, making it ideal for real-world applications.
  • Consensus Model: NEO’s dBFT consensus model aims to achieve finality in transactions, reducing the risk of forks and enhancing the integrity of smart contracts.