A comprehensive guide on different types of smart contracts and their uses

According to a Smart contract development in Kolkata, a smart contract is a unique offering with the most unique features of blockchain that operates in a decentralized way and is shared with all the parties in the network without the need of intermediaries. Smart contracts are used for implementing a computerized protocol having the capability of controlling, verifying, and executing the transactions according to per terms and conditions entered in the contract.

Smart Contract – How is it defined?

Having a lot of benefits smart contracts are slowly but steadily gaining pace and are being used in almost every vertical to automate the execution of an agreement without the involvement of the intermediaries. It is a cluster of algorithms that are stored in the blockchain network to be executed only when predetermined conditions mentioned in the algorithm are met. For the incorporation of a smart contract in the Tron network, Tron smart contract development can help in saving time and resources. This self-executing contract is making the business processes work efficiently in an automated manner.

The best thing about a smart contract is that it is specifically built to run on the blockchain network (example – Ethereum, Tron, etc.) and same as other smart contracts it is also a collection algorithm residing at a specific address on the network of blocks or nodes. Using the codes written in a smart contract different rules can be defined and enforced same as done using regular contracts. If imposed the right way, smart contracts are virtually impossible to hack keeping everything safe under one roof.

What are the types of smart contracts used in the decentralized ecosystem?

•    Ethereum: Also known as ERC-20 smart contract, Ethereum smart contract is most often used by people. However, many are still not aware of its advantages but are gradually used by start-ups in the last two decades. Ethereum smart contract development is best used to facilitate everything from online games to ICOs. Most of the ICOs are now using Ethereum smart contracts for the ICO offerings, Ethereum has launched a new set of clearly defined rules for developers to follow, making the development process of the contracts easier and less risky.

•    Tron smart contract: A Tron smart contract is basically a computerized protocol having the capability of controlling, verifying, and executing the transactions as per terms and conditions mentioned in the contract. As depicted by a Tron smart contract development company, this type of smart contract comes equipped with its own smart contract protocol which is followed strictly.


•    Polkadot smart contract: It is a separate blockchain network mostly known for hosting parachains on its blockchain network. The smart contract of Polkadot is used by many business processes for being less complicated. This smart contract is highly flexible and capable of handling multiple transactions in a very short time span.

•    BSC (Binance Smart Chain) smart contract: This is a decentralized smart contract particular developed to streamline the transaction processes in the decentralized DeFi ecosystem. BSC smart contract is particularly developed on the basis of the Proof of Staked Authority (PoSA) consensus mechanism which helps process transactions and rewards the crypto stakes at the same time.

How do smart contracts work and their advantages?

Before implementing a smart contract it is important to know how to use it and how a smart contract works automating your business process. As depicted by a Smart contract development company, these contracts are a type of self-executing agreement initialized between two parties (without a middleman) running in the form of a computer code. Smart contracts use blockchain for storing data in the public database or a network where information once stored cannot be manipulated later.

Some major advantages of using smart contracts in a decentralized network can be –

•    A smart contract keeps everything transparent as the terms and conditions are visible and accessible by all.

•    Working round the clock a smart contract bridges any communication gap in an efficient manner.

•    Data stored in the blockchain network is encrypted using the latest data encryption technology available today.

•    The smart contracts are very much capable of recording minute details of every transaction happening.

The involvement of a smart contract in any business process further helps in the reduction of operational costs as well. Being able to execute as per the algorithm written, the smart contracts are highly secure and can be used to solve any issues which otherwise would have needed a lot of paperwork and the intervention of multiple middlemen.