Smart Contracts Study Guide

Smart Contracts Study Guide

Glossary

Smart Contract A digital agreement that is stored and automatically executed on a blockchain network. Blockchain A distributed, immutable database of transaction records. Cryptocurrency A digital or virtual currency that uses cryptography to secure transactions and control the creation of currency. Ethereum A blockchain platform that supports smart contracts and other decentralized applications. Solidity A programming language used to write Ethereum smart contracts. Oracle A data source that connects smart contracts to the outside world. Multi-Signature A digital signature scheme that requires multiple keys to authorize an action. Gas A unit of computation used to execute smart contracts on the Ethereum network, which users pay for Gas. Gas Price The amount of Ether a user is willing to pay per unit of Gas, similar to the price of oil. Gas Cap The maximum amount of Gas a user is willing to pay to execute a transaction or contract. Token A unit of cryptocurrency that represents a digital asset or a specific use case. Short Answer Questions

What is a smart contract and how is it different from a traditional contract?

Explain the role of blockchain technology in smart contracts.

What role does an oracle play in a smart contract? Give an example.

Why is multi-signature important for the security of smart contracts?

What is Gas in Ethereum? How does it affect the cost of smart contracts?

What problem does the invention described in attempt to solve?

Briefly describe the operating process of the proposed smart contract loan system.

How does the system use digital assets as collateral?

How does the system manage the value fluctuations of the collateral assets in the smart contract?

What are the potential advantages of the proposed technology?

Short answer questions

A smart contract is a digital agreement stored on the blockchain and executed automatically. Unlike traditional contracts that require third-party intermediaries, the execution of smart contracts is controlled by code, without the need to trust third parties.

Blockchain technology provides a decentralized, transparent and secure execution environment for smart contracts. Smart contracts are stored on the blockchain, and all transactions are recorded in the blockchain, which can be verified by anyone, ensuring the transparency and traceability of contract execution.

Oracle is a data source that connects smart contracts to the outside world and provides real-world information to smart contracts. For example, a smart contract for cryptocurrency mortgage loans can use Oracle to obtain real-time price data of cryptocurrencies.

Multi-signature improves the security of smart contracts because it requires multiple key authorizations to perform actions, such as changing contract terms or transferring funds, preventing single points of failure and malicious behavior.

Gas is the unit of computation used to execute smart contracts in the Ethereum network, and users need to pay Gas fees. The higher the gas price, the more expensive it is to execute a smart contract. Complex smart contracts require more gas to execute and are therefore more expensive.

Attempts to solve problems in traditional lending systems, such as the need to trust a third party, inefficiency, high costs, and difficulty in pledging digital assets.

The proposed smart contract loan system allows borrowers and lenders to transact directly through smart contracts. Borrowers pledge digital assets as collateral and lenders provide loans. Smart contracts automatically manage loan terms, including payments, interest rate adjustments, and collateral management.

The system locks the borrower's digital assets in a smart contract as collateral for the loan. If the borrower fails to fulfill the terms of the contract, the smart contract can automatically execute the collateral and transfer the digital assets to the lender.

The system uses Oracle to monitor the real-time market value of the collateral assets. If the collateral value falls below a preset threshold, the smart contract can trigger actions such as margin calls or liquidations to reduce the lender's risk.

The proposed technology has greater transparency, efficiency, and security, and can reduce costs while providing a more convenient way to pledge digital assets.