8

I'm new to Tezos, and in fact to Bitcoin in general. I have been reading up on it a good bit, though, and I ran across an article on cryptobriefing which states that Tezos, like Ethereum, uses smart contracts.

What exactly is a smart contract - and how does it compare with a "dumb" contract?

3

A smart contract is a small script that is directly stored and executed on the blockchain by bakers for Tezos (and miners in a POW setting).

Smart contracts enable users to handle tokens, derivative tokens (as in ERC20 contracts), conditions, events, etc., in an explicit and automatic way.

A 'dumb' contract is a regular contract written on a piece of paper without the automatic execution. Also smart contracts need to be fully explicit whereas regular contracts leave a lot to interpretation.

A nice primer by the CFTC, a US regulator: https://www.cftc.gov/sites/default/files/2018-11/LabCFTC_PrimerSmartContracts112718.pdf

| improve this answer | |
  • Can you please elaborate on the 'explicit' nature of smart contracts a bit more? – DPF Feb 2 '19 at 14:18
  • 2
    Explicit means that the code of a smart contract is public and stored on the chain which has two consequences: it is readable by everyone and it is directly followed in a deterministic way by bakers. – FFF Feb 2 '19 at 14:23

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.