Cosmic FOMO

What are smart contracts and why are they so smart? Today’s article is dedicated to this indispensable tool of the blockchain industry. We’ll break down what it is, what smart contracts are for and how to verify them for authenticity.Let’s go!What are smart contractsThe smart contract concept was coined by software scientist Nick Szabo in 1993 to refer to a digital algorithm created using computer code and designed to transfer information. Smart contracts exist in the form of a code in a registry — a blockchain. It is managed by a network of computers.A smart contract helps to establish and maintain contractual relationships in the blockchain industry, and makes sure that the terms of the contract are not violated.What do we need smart-contracts forThe main purpose of a smart contract is security in conducting transactions. In the fiat world, the role of smart contracts is performed by notaries, lawyers, and bank clerks. A lot of time, nerves and money must be spent to ensure that the intermediaries work. In the blockchain industry, everything is automated. Smart contracts do everything themselves. Transactions conducted with smart contracts are characterized by a high level of security for both parties. Failure to fulfill the condition of a smart contract carries liability and even penalties.Smart contract benefits<ol><li>Security</li></ol>The absolute advantage of a smart contract. The contract cannot be lost, and the data in it cannot be changed, so the parties don’t have to worry about that.2. AutonomyAnother important point. All intermediaries and additional resources are replaced by it, our smart contract.3. EconomyEverything is much cheaper than when drafting a complex contract in person. There are no extra costs and no additional fuss, which no one needs.4. SpeedEverything happens much faster due to the automation of processes.Smart contracts: taking a wrong turnIt would seem that the perfect “watchdog” for transactions has been found. What could possibly go wrong? Everything. More precisely the contract can be fake, a scam. And therefore, before concluding a deal, it is necessary to carry out a check:<ol><li>Check the contract’s address — whether it matches the original data provided by the token issuer.</li><li>Review the contract’s code — the publicly available code helps you verify the authenticity of the contract.</li><li>Check the contract’s audit — if a third-party company has analyzed the contract, this data will help you in authentication.</li><li>Review the list of holders — if many of them are token sellers, this may be a sign that the contract was created only for a quick token sale and not for the long-term development of the project.</li></ol>These simple steps will help you identify scams and not fall into a fraudulent scheme. And once again we come to the issue of security. In addition to scammer smart contracts, there are many scammers in the industry who are eager to snatch your money. To find out how to protect yourself, read our previous <a href="https://medium.com/cosmic-fomo/safety-comes-first-or-how-to-protect-your-assets-from-scammers-f07a3ac91a8c" rel="noopener noreferrer nofollow">article</a>.ConclusionA smart contract is a great alternative to a traditional transaction without involving third parties and additional resources. But you should realize that any system, even the most perfect, can be subject to scam attacks. The scammer market is not dormant. It is possible and necessary to use the latest technologies, but remember — security is paramount &#x1f642;Follow Cosmic FOMO social media and don’t miss interesting and important news!<a href="https://t.me/CosmicFOMO_Channel_en" rel="noopener noreferrer nofollow">Telegram</a> | <a href="https://youtube.com/&#64;CosmicFOMO." rel="noopener noreferrer nofollow">YouTube</a> | <a href="https://medium.com/&#64;CosmicFomo" rel="noopener noreferrer nofollow">Medium</a> | <a href="https://twitter.com/CosmicFomo" rel="noopener noreferrer nofollow">Twitter</a>

Smart Contracts: When, Where and How

Cosmic FOMO

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