Smart contracts enable the automation of contracts, and this allows for smooth transactions. Smart contracts are regulations that are agreed upon between different parties. This ultimately results in fair transactions between parties.
What are Smart Contracts
During the recession of 2008, there were many frauds taking place in the traditional finance sector and the world’s financial health was in a mess. Similarly, following the rise of NFTs, we have witnessed a number of scams that have negatively affected the market.
Cryptocurrencies were deemed to be inflation-proof and the concept of smart contracts was generated there. This would lead to the transparency of transactions and would give power back to the people.
However, there exist possibilities of scams in the world of crypto. For example, some companies have run away with the investors’ money by luring them with the promise of great returns only to then run away with the money, a type of scam known as rug pulling.
Frauds Related to Crypto
The important factor which needs to be kept in mind while tackling such scams and frauds is that one needs to have a basic knowledge of transactions. The way to detect frauds in smart contracts are:-
- SetApprovalforAll
This is a function that appears on a regular basis when you engage on Web3. It mostly pops up when you list your NFT for minting.
- SafeTransferFrom
This pops up when there is a transfer of NFTs, and it is mostly when the NFT is an easily available one.
- SendEth
It is very easy to decipher when this pops up. It mainly occurs when there is a transaction in Ethereum.
Recently, a crypto security firm has claimed to be able to hack Trezor T Wallet. This proves there is still the possibility of frauds and of being hacked. There is still more development that must be done in the backend.
AI And Smart Contracts
Blockchains are mostly based on C++ and Java, Ethereum is based on Solidity, and these are all publicly accessible languages. So if one wants to hack into those servers or even manipulate the smart contracts, one can do it for one block that hasn’t formed the chain yet, but to manipulate a full chain within a decentralized network would be next to impossible.
Even if there is a scam with someone, there will be an update for people all over the chain, and everyone will be notified. Smart Contracts can be integrated with AI for the automation of forming, implementing contracts and to ensure the existence of a secure network ahead.
AI would be a key turning point in upgrading the blockchain and its transactions, which would form a solid foundation for smart contracts.
