Smart contracts and tokens - Bitcoin 101

Bitcoin is a peer-to-peer electronic cash system, but it can be used for much more than just sending and receiving money. Bitcoins features are revolutionising entire industries by cutting out third parties, reducing costs and increasing transparency in order to send either bitcoin BTC or Bitcoin cash bch.

Usually, all your wallet needs to do is provide a valid signature, but bitcoin was designed with many more ways to decide whether certain coins can be spent or not. In fact, it has its own entire scripting language, which is sort of like a programming language.

That script can be used to set up things like shared wallets, inheritances and more bitcoin. Cash has added even more functions that allow for things like recurring payments and noncustodial financial services, like those provided by local Bitcoin comm, where we can act as a mediator for crypto currency trading without ever holding the funds involved.

These special use cases that use Bitcoin script are often referred to as smart contracts. You can also attach data to Bitcoin transactions that doesn't have any effect on the transaction itself. Instead, it's, just a way of putting data on the blockchain signed by your private keys.

Thanks to a clever protocol, we can send tokens using that extra transaction data. Tokens are a way to represent assets electronically. Nowadays, paper certificates are the standard way to prove you own, a house or a car, but those ownership documents could easily be replaced by tokens on a blockchain which can be transferred safely and cheaply without the need for a trusted.

Third party tokens can also be used to represent stocks, reward points, memberships, tickets, video game items. The list goes on and because token transactions happen within Bitcoin transactions, all the same scripting functions are available, at least on Bitcoin cash.

That opens up possibilities for entire stock markets. Futures markets and other financial services to be completely replaced with a cheaper, simpler and more accessible blockchain, based alternative to learn more about Bitcoin and Bitcoin cash watch.

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