Ethereum is a decentralised platform on which smart contracts run: applications that run exactly as they were programmed, with no possibility of downtime, censorship, fraud or third-party interference. The ambition behind smart contracts is to provide a higher level of security of execution than that currently offered by contract law, by reducing transaction costs and legal costs associated with the formalisation of contractual obligations.
- Smart Contract: In everyday language, a contract refers to the terms and nature of an agreement between two parties. A smart contract is based on the same principle, except that it is based on programmable computer code and has no legal value. It is called 'smart' because it runs alone and automatically if the necessary conditions are met. Let's look at an example: a person A wants to transfer money to a person B. A and B agree on the terms of the transfer, including the amount, and formalise them in computer language, which corresponds to the drafting of the smart contract. They then send this smart contract to the blockchain. Once the conditions are met, the smart contract runs and the transaction is carried out (the money is transferred).
It will then be recorded in the blockchain in a transparent and unchangeable way that A has transferred to B the amount of money defined in the smart contract.- Decentralised application: The most interesting aspect of Ethereum is the ability to program smart contracts to carry out tasks that are far more complex and much broader than a simple transfer of money. For example, it is possible to create digital tokens, crowdfunding platforms, decentralised insurance and more. For example: Fizzy by Axa