What are Smart Contracts in Blockchain, its Importance & How Smart Contracts Work

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Whenever someone buys a house, begins a new job, or purchases a candy bar, a contract is created between the two (or more) parties involved in the exchange. This contract defines and records the terms of the transaction, denoting the required actions of each participant.
Alone, a standard contract has no power to enforce the terms that it defines. Instead, a legal or governmental third party oversees the execution of a standard contract, ensuring that each party faithfully carries out their end of the bargain. If the terms are violated, the transacting parties must rely on this intermediary to rectify the broken contract.
However, thanks to recent advancements in distributed ledger technology, lawyers or other intermediaries are no longer required to oversee contracts. Using smart contracts, people can, for the first time, execute and enforce contracts without involving middlemen.
This video will give you a brief introduction to smart contracts along with how they actually work, empowering you to understand their fundamental concepts and how smart contracts will change the world.
Video Walkthrough,
0:00 Introduction
0:15 What are Smart Contracts in Blockchain
0:42 What’s the Main Idea Behind a Smart Contract
1:01 Smart Contract Blockchain Example
2:12 Why Trust a Smart Contract
2:53 How Smart Contracts Work
3:10 Example of Smart Contract
5:01 What's a One-Size-Fits-All Smart Contract
6:07 Benefits of Smart Contracts
7:18 Conclusion
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Got feedback on this video? Feel free to share your views in the comment section below.
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[@Gamesgainonline]

Smart contracts explained easily... Good job!👍👍

[@thatindianinvestor]

+1

[@learnwithwhiteboard]

Glad it was helpful!! ❤️👍

[@authorcode1724]

Finally an excellent video on smart contracts! 👏 covers all major points, great example!

[@learnwithwhiteboard]

Thanks for your love and appreciation ❤️👍

[@usamazahid1]

very nice illustrations and nice tutorial.....share an example and a followup video explaining an example of contract and how any laymen non technical person can make a smart contract and deploy it on blockchain

[@learnwithwhiteboard]

Great suggestion! I'll start working on such content to help viewers understand how smart contracts work on the better notion, once my current pipeline gets finished. Thanks, Zahid for sharing a constructive suggestion. Much appreciated!

[@changingkeys2668]

which app/software to use for making such videos?

[@meganw6007]

Perfect examples, that really help me make sense of it and conceptualize all these ideas. Thank you again!

[@learnwithwhiteboard]

Hi Megan, I'm glad that I was of your help. Thanks for your love, support and appreciation ❤️👍

[@satviksingh6229]

Can u tell in detail detail between ethereum blockchain and cardanos blockchain

[@learnwithwhiteboard]

Sure, I'll give this topic a shot!

[@manjeetkaur-eu3jl]

It’s very helpful

[@learnwithwhiteboard]

Glad it was helpful! Thanks for your love and appreciation ❤️👍👍

[@rnairakhil4104]

How smart contract verifies address & code ?.... It can be done only by human interaction right?....Or is there a way to automate it as well?

[@learnwithwhiteboard]

While smart contracts can be programmed to have human interaction, but there are a few which are 100% automated. Moreover, whenever verification comes into the picture, its the job of a smart contract creator to have great confidence that the contract will behave correctly no matter what value is to be transferred, no matter what the balances of the two accounts are/will be, and no matter which account is to receive the value. I would highly recommend you to read about formal verification of smart contracts runtimeverification.com/blog/how-formal-verification-of-smart-contracts-works/

[@rnairakhil4104]

@@learnwithwhiteboard I read the blog post. But my question is, how can the smart contract verify the house address? It can only be done by humans right? and then there arises chances of dispute and all challenges assosciated with the normal agreement system we follow today. Then what is the benefit of using a smart contract in this case?

[@syedayub3981]

Can developer change smart contract?

[@learnwithwhiteboard]

Yes and no. Contracts deployed on a blockchain are immutable. This means that the address and the code of that Smart Contract can’t be modified since it’s permanently written on the blockchain. However there are ways to use a new contract instead of that one, which is similar to “updating” a contract. One way to update the code is to create an intermediary Smart Contract that will hold the address of the active Smart Contract. So all the calls and transactions will be redirected to the active version with the function 'delegatecall'. That way, you’ll be using the same contract address but that contract will execute a different Smart Contract code in the end. From an “updated” contract. Note that there are important security risks when delegating calls and that you have to be extra cautious when designing upgradable smart contracts.