Business,Operations,Guide,Module 1.2
Module 1.3
Ethereum and Smart Contracts
If Bitcoin introduced digital scarcity, Ethereum (ETH) took blockchain a step further by introducing programmable transactions known as smart contracts. Ethereum is a blockchain that supports decentralized applications through smart contracts – self-executing pieces of code that run on the blockchain. We often say “Ethereum is the main transactional network for decentralized operations" for organizations like ours. This is because Ethereum’s smart contracts enable complex procedures: from financial services (decentralized lending, trading platforms) to digital identities and organizational governance. Most of Bittrees’ own projects and tools are built on or compatible with Ethereum.
A smart contract is essentially software code that has been uploaded to the blockchain. Once deployed, it will automatically execute specific actions when predetermined conditions are met, without requiring further human intervention or a third-party facilitator. For example, a simple smart contract might state: “if person A sends 1 ETH to the contract, then release a digital asset to person A. ” Because the code is on the blockchain, the execution is trustless (you don’t need to trust a person – the network will execute the code as written) and transparent (anyone can audit the contract’s code and transaction history). Smart contracts can hold and transfer funds, enforce rules, and even call other contracts, enabling a whole ecosystem of interconnected decentralized applications (dApps, covered in Module 4).
An analogy often used to explain smart contracts is a vending machine. A traditional legal contract might require enforcement – for instance, if conditions are met, parties must manually fulfill obligations or go to court if they don’t. A vending machine, however, automatically enforces a simple contract: If you insert the correct amount of money and press a selection, then it dispenses your product. There’s no need for a shopkeeper’s intervention or trust in a person – the mechanism executes the deal. Similarly, a smart contract automatically executes the terms coded into it. Once deployed, it will do exactly what it is programmed to do, every time, for anyone who interacts with it correctly . This removes a lot of the friction and ambiguity that can occur in traditional agreements. However, unlike a vending machine, smart contracts handle digital value and are secured by cryptography across a distributed network.
Ethereum’s role: Ethereum currently remains one of the most widely used blockchains for smart contracts and dApps. However, this popularity comes with the downside of network congestion and transaction fees (called gas fees). Gas fees on Ethereum can fluctuate widely based on demand (more on gas in Module 4). Despite this, Ethereum’s broad adoption and robust security have made it a default choice for many projects using these digital toolkits. Bittrees uses Ethereum for many of its operations (e.g., issuing tokens, running decentralized governance votes, etc.), though we remain blockchain-agnostic when needed – meaning we
can also utilize other networks if they better suit a particular task.