How smart contract technology works in the bitcoin network
Bitcoin is a well-formed system that works efficiently with no error. It transfers currency from one part of the world to another so quickly that no one can imagine the traditional banking system. For this extraordinary functionality, bitcoin has used several technologies; smart contract technology is one of them. The Blockchain network of bitcoin uses this technology to do the work successfully with specific manners.
Smart contract technology: The technology is actually a way to do work that is more like a protocol. The protocol sets some pre-fixed commands or criteria on the system where it is applied. When the system is being used, meeting those criteria will trigger the commands and due to the set protocol, the technology will work.
For each work, there are different criteria set. When a user of the system put some input to do specific work, he or she is going to trigger the command specific set for that work only. And, once the criteria are met, the specific work will be executed by the system. Thus, different smart contracts’ criteria work together to run the whole system.
Its role in bitcoin transactions: In bitcoin, the smart contract technology works the same way. The bitcoin transactions include a special method that is called the scripting method. It is a computer language and bitcoin use scripting as a security measure. Every time transactional inputs are put in the system, they form a message that is encrypted to an unreadable language that can’t be read by the scammers and the transactions are done in this way. Here is the detailed method described in the points below.
- When you are sending money you have to request for the bitcoin address from your friend. He or she will get the address from their bitcoin account. The bitcoin address is a hashed form of the public key.
- Once you get the address, you have to copy-paste it onto the specific box in your account.
- Now, the private key you have in the digital wallet is needed to access the bitcoin you hold in the Bitcoin Blockchain. So, to send coins to your friend, you first need the private key to get the bitcoins.
- Next, you have to fill in all the other needed data like the amount of bitcoin you want to send.
- Once you do this, a message will be formed that we have just talked about above. It will contain the receiver’s bitcoin address, your private key, and the bitcoin amount.
- Now upon pushing the send button the network node of bitcoin will verify the message that your public key matches with your private key. It actually verifies that the amount of fund that can be taken by the transaction from your private key access.
- Now, you have put all the information to the right points where they are needed and they are validated too. And as a result, the transaction is executed and bitcoins are transferred from your account to your friend’s account.
- So, here the set criteria are met by putting the right information in its places and triggering the inputs. Thus the smart contract helps transfer the bitcoins.
Benefits of smart contract technology in bitcoin:
- The most important benefit of technology is it makes every transaction easier. The protocol is previously set as a base to make the work done. So, the bitcoin network runs efficiently.
- The technology helps complete all the work fast and with no error because it is a pre-fixed method that can’t be changed.
- Because of its fixed protocol, the bitcoin network is safe and secure. No data modification or reversing a transaction can be possible.
Conclusion:
The smart contract technology makes bitcoin attractive for its fast and efficient fund transfer. It impacted the bitcoin network so much that the demand for bitcoin is continuously increasing among people day by day pushing its value up. It has become a high-value investment now where investors are investing crazily with several trading platforms like the https://bitcoin-billionaire.com/. To taste the amazing features of bitcoin and the smart contract technology you can also use bitcoin, buy it, invest in it, or utilize it.
