19 Apr, 24

Ethereum Smart Contracts: How They Changed Crypto

ethereum smart contracts banner


Ethereum, launched in 2015, revolutionized the digital world by introducing “smart contracts,” self-executing contracts with the terms of the agreement directly written into code. This innovation not only expanded the functionality of blockchain beyond simple financial transactions like Bitcoin but also set a new standard for how digital agreements are implemented and enforced.

The Concept of Smart Contracts

Smart contracts are automated agreements that execute and enforce themselves based on predefined rules and conditions, akin to a vending machine that dispenses products once payment is received​. These contracts run on the Ethereum Virtual Machine (EVM), which acts as a global, decentralized computer, hosting and executing these contracts with high reliability and transparency​.

Impact on the Cryptocurrency Industry

Ethereum smart contracts have profoundly impacted the cryptocurrency industry by enabling decentralized applications (dApps) that offer services ranging from financial tools to games without needing a central authority. This has led to the rise of decentralized finance (DeFi), where users can borrow, lend, or trade assets in a trustless environment, dramatically increasing the scope and functionality of blockchain technology​.

While promising, smart contracts face both legal and technical challenges. Legally, the ambiguity in how current laws apply to digital contracts and the enforceability of these agreements remains a hurdle​. Technically, writing secure smart contract code requires high precision to avoid bugs and security vulnerabilities, as these contracts are immutable once deployed​.

Advancements and Innovations

In response to these challenges, there have been significant advancements in smart contract languages and security. Languages like Solidity have been developed specifically for Ethereum, allowing programmers to write more secure and functional contracts​. Innovations such as modular smart contracts and upgradeable contracts have also emerged to address issues of flexibility and upgradability.


Ethereum smart contracts have undeniably transformed the landscape of the cryptocurrency industry by providing a platform for building complex, decentralized applications that go beyond mere currency transactions. As the technology matures, it continues to push the boundaries of what’s possible within the blockchain ecosystem.


  1. What is a smart contract?
    • A smart contract is a program that automatically executes and enforces the terms of a contract when certain conditions are met.
  2. How do Ethereum smart contracts differ from Bitcoin?
    • Unlike Bitcoin, which primarily focuses on peer-to-peer financial transactions, Ethereum’s smart contracts enable a broader range of applications, including but not limited to financial services, through decentralized applications.
  3. What are some common uses of Ethereum smart contracts?
    • Common uses include creating decentralized financial services, automated token sales, and digital identity verification systems.
  4. What are the legal challenges associated with smart contracts?
    • Legal challenges include the lack of clear regulations regarding digital contracts, issues with enforceability, and the need for traditional legal frameworks to adapt to the concept of agreements executed entirely in code.
  5. Can smart contracts be upgraded or changed after deployment?
    • Generally, smart contracts are immutable once deployed to the Ethereum blockchain. However, developers have devised methods such as upgradeable contracts or modular smart contracts to allow for certain changes post-deployment.

About Zerocap

Zerocap provides digital asset liquidity and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets with industry-leading security, contact our team at [email protected] or visit our website www.zerocap.com


This material is issued by Zerocap Pty Ltd (Zerocap), a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799. Material covering regulated financial products is issued to you on the basis that you qualify as a “Wholesale Investor” for the purposes of Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account the financial objectives or situation of an investor; nor a recommendation to deal. Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.
 Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

Like this article? Share
Latest Insights

19 Apr, 24

What is the CBDC Anti-Surveillance State Act?

On May 23, 2024, the U.S. House of Representatives passed the CBDC Anti-Surveillance State Act. This legislation, introduced by Congressman Tom Emmer, aims to prevent

19 Apr, 24

Blockchain Fintech Solutions: Bridging the Ecosystems

Blockchain technology is revolutionizing the financial technology (fintech) landscape by providing innovative solutions to longstanding challenges. As the demand for more secure, transparent, and efficient

19 Apr, 24

How is Bankrupt FTX Paying Back Its Customers?

FTX, once a major player in the cryptocurrency exchange market, filed for bankruptcy in November 2022 following revelations of significant mismanagement and fraudulent activities. The

Receive Our Insights

Subscribe to receive our publications in newsletter format — the best way to stay informed about crypto asset market trends and topics.

Want to see how bitcoin and other digital assets fit into your portfolio?

Contact Us
Ready to sign up?
Create an Account