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3.2 Ethereum: Types of Ethereum Accounts

Externally Owned Accounts (EOA) EOA is an account controlled by a private key that has the ability to send Ethers and messages from it.

Smart Contract

A code running on top of the Blockchain containing the set of rules for the nodes to agree upon so that they interact with each other.

Features of Smart Contracts

  • The simplest form of decentralization

  • Lowers transaction cost

  • Eliminates the need for the third party

  • Automatic agreement enforcement

  • A higher degree of security

  • Turns legal obligations into automated processes

Characteristics of Smart Contract

  • Self-verifying

  • Self-executing

  • Cost Saving

  • Tamper Resistant

Process of Smart Contracts

  • An optional contract between the parties is written as a code into the Blockchain. The individuals involved are anonymous, but the contact is made through a public ledger

  • A trigger event like an expiration date or a strike price is hit, and the contract executes itself according to the coded terms

  • Regulators can use the Blockchain to understand the activities in the market while maintaining the privacy of an individual’s position

3.2 Ethereum: Types of Ethereum Accounts

Externally Owned Accounts (EOA) EOA is an account controlled by a private key that has the ability to send Ethers and messages from it.

Smart Contract

A code running on top of the Blockchain containing the set of rules for the nodes to agree upon so that they interact with each other.

Features of Smart Contracts

  • The simplest form of decentralization

  • Lowers transaction cost

  • Eliminates the need for the third party

  • Automatic agreement enforcement

  • A higher degree of security

  • Turns legal obligations into automated processes

Characteristics of Smart Contract

  • Self-verifying

  • Self-executing

  • Cost Saving

  • Tamper Resistant

Process of Smart Contracts

  • An optional contract between the parties is written as a code into the Blockchain. The individuals involved are anonymous, but the contact is made through a public ledger

  • A trigger event like an expiration date or a strike price is hit, and the contract executes itself according to the coded terms

  • Regulators can use the Blockchain to understand the activities in the market while maintaining the privacy of an individual’s position

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