Overview of smart contracts and decentralized applications (DApps): A new chapter in blockchain? -web3 series Section 4

As an old friend of Web3 around you, I know that the terms smart contracts and DApps sound cool, but you may also find them abstract and difficult to understand. It doesn't matter! Today, I will use the language closest to life to help you thoroughly understand the core of these two blockchain technologies, tell you why they are important and how they can change our digital world.

What is a smart contract?

A smart contract, simply put, is a program that executes automatically. It runs on the blockchain and can automatically execute pre-written rules and conditions. There is no human intervention, the process is transparent and cannot be tampered with.

You can think of a smart contract as a "vending machine": when you insert coins (conditions are met), it automatically gives you a drink (contract execution), without the need for a middleman.

Advantages of smart contracts:

• automation: Reduce manual operations and improve efficiency.
• Transparent and credible: All execution steps are public and can be verified by anyone.
• cannot be tampered with: Once deployed, the rules cannot be changed to ensure fairness.

According to data from the Ethereum official website, there will be more than 4 million smart contracts deployed on the Ethereum chain in 2024, covering many fields such as finance, games, and art.

What are decentralized applications (DApps)?

DApps, as the name suggests, are decentralized applications that run on the blockchain. They use smart contracts as back-end logic, and the front-end can be a web page or mobile app.

Features include:

• Decentralization: No single server or organization controls.
• Open and transparent: The code and data are open to the public and anyone can participate and audit.
• User owns data: Users have control over their own assets and information.

For example, the traditional Uber is a centralized taxi-hailing platform, and the platform controls user data and capital flows. Decentralized taxi-hailing DApps automatically match drivers and passengers through smart contracts, and funds are transferred directly without the need for a third party.

Practical application areas of smart contracts and DApps

Real case sharing

Case 1: Compound (DeFi lending platform)Compound uses smart contracts to automatically manage lending, allowing users to borrow and lend without the need for traditional banks or intermediaries. Its total locked assets will exceed US$10 billion in 2024, and the number of users continues to grow.

Case 2: Axie Infinity (blockchain game)This game manages game assets and transactions through smart contracts. Players truly own in-game pets and land, realizing a "play and earn" model. Active users will exceed 2 million in 2023.

Case 3: VeChain (supply chain management)VeChain uses smart contracts to track the entire chain of goods from production to sales, helping luxury brands prevent counterfeiting and enhance consumer trust.

What changes have smart contracts and DApps brought?

• DisintermediationIntermediate links are replaced by smart contracts to reduce costs and improve efficiency.
• Greater security and transparencyData cannot be tampered with, reducing the risk of fraud and human operations.
• Increase user controlUsers have ownership of assets and data, promoting the democratization of the digital economy.

How to participate in smart contracts and DApps?

• Use wallet to connect DApp: Digital wallets such as MetaMask can connect to various DApps and experience blockchain applications.
• Try DeFi services: Lending, trading and other services are very mature and suitable for beginners to try with small amounts.
• Pay attention to NFT and gaming fields:Digital art and blockchain games are interesting entrances into DApps.

[Frequently Asked Questions (FAQ)]

Q: Are smart contracts safe? Will there be any loopholes?

A: The security of smart contracts depends on the quality of the code. There have been financial losses due to code vulnerabilities in history. It is recommended to choose well-known projects and audited contracts.

Q: What is the difference between DApp and traditional App?

A: DApp does not have a central server, and data is stored decentrally on the blockchain, making it more transparent and secure.

Q: Are there any handling fees for using DApp?

A: Most DApp operations require payment of "Gas fees", which are network computing fees. The specific fees vary according to the congestion of the blockchain network.

Q: I don’t know programming, can I use DApp?

A: Of course. Many DApps now have simple designs and user-friendly experiences, and do not require programming skills to be used.

Summarize

Smart contracts and DApps are not only the cornerstone of blockchain technology, but also the key driving force in the digital economy and decentralized era. They bring new experiences of automation, transparency and user control.

As your good friend of Web3, I encourage you to try more of these new technologies and experience firsthand the changes they bring to your life and work. The future belongs to those who know how to seize the dividends of technology. Let’s take this step together!

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