In the first type of app, a user may need to exchange ether as a way to settle a contract with another user, using the network’s distributed computer nodes as a way to facilitate the distribution of this data.
By formalizing and securing new digital relationships, the blockchain revolution is posed to create the backbone of a layer of the internet for transactions and interactions of value.
So, if the data and its history are important to the digital relationships they are helping to establish, then blockchains offer a flexible capacity by enabling many parties to write new entries into a system of record that is also held by many custodians.
The Ethereum Virtual Machine then executes smart contracts in ‘bytecode’, or a series of ones and zeroes that can be read and interpreted by the network.
It’s worth noting that bitcoin was the first to support basic smart contracts in the sense that the network can transfer value from one person to another.