Crypto Decrypted

3What Makes a Smart Contract Smart?

In this chapter, we cover smart contract and smart contract platforms. Smart contracts are programs that are executable and live on a blockchain. Smart contract platforms are the actual blockchains themselves. We'll distinguish the difference between the two and give you a better understanding about each concept and why they're so important to the technological revolution – they create an entire new world for what's possible.

What Is a Smart Contract Platform?

With Bitcoin handled, we're now going to explore one of the most exciting features of blockchain technology, and that is the concept of a smart contract. It's so important that there is a special group of blockchains known as smart contract platforms that are specifically built to facilitate the use of this simple but amazing feature. The smart contract platform is a blockchain that provides the backbone for building decentralized applications. The ecosystem consists of wallets and tokens, as you would expect, along with a programming language that allows developers to build blockchain applications. Such applications are known as Dapps or decentralized applications, and they are entirely functioning systems that are peer‐to‐peer, generally with all of the standard properties of a blockchain. Smart contract platforms are known as “Layer 1,” while the applications that are built on top of them are denoted as “Layer 2.” Smart contracts can be built into the applications and will run ...