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