Cardano has been known to achieve 250 Transactions Per Second (TPS) with plans to grow this number much higher. The 250 TPS simply means the number of transactions that get to be processed on the blockchain each second. This number compares very favorably to other popular networks: Ethereum, for example, is currently at only 30 TPS, which leads to network congestion and high costs for users.
The birth of Smart Contracts was back in 2014, when Charles Hoskinson and others launched the first 2nd generation blockchain, Ethereum, which brought a programming language to blockchain. The ability to run any computer programing logic on the blockchain made smart contracts possible. A Smart Contract works by embedding the involved parties’ terms and conditions and then executing the transaction when those particular terms and conditions are met. Smart Contracts make it easy for users of blockchain to get transparent and trustless interactions..
How exactly do Smart Contracts work?
Just like any other kind of transaction, there are conjunction words that are used to develop the terms and conditions. The “If” and “When” are written into code and on a blockchain and embedded within the transaction so that Smart Contracts can follow them. The involved parties or participants need to define all the rules that will govern their transaction and make sure to look at all the exclusions. An example of a transaction within a Smart Contract would be “I will pay you when you do my laundry” This means that you only get the payment once you are done with the laundry.
Generally, Smart Contracts come with a lot of ease when it comes to making transactions. It has removed the need for intermediaries who would otherwise carry out the transaction, and who might even alter it for personal gains, not to mention the fact that they come at a certain cost. Speed is guaranteed, as Smart Contracts are automated. This means that as long as the preset conditions are met, the contract is immediately executed. There is no wastage of time during the execution of the transaction. On Cardano, Smart Contracts can do basically what a human being can do like cast a vote or even stake their ADA.
We are just at the beginning of the story of what Smart Contracts can do. As this tool becomes more popular and well-known, having a reliable network with high TPS will become even more important! We think Cardano is well-positioned to continue being a leader in this space.