#密码资产动态追踪 Before diving into Web3, you must understand these blockchain fundamentals

Following market fluctuations is important, but more crucial is enhancing your professional knowledge. I’ve decided to compile a straightforward guide: what exactly are smart contracts and oracles, and what’s the difference between Bitcoin and Ethereum.

**What are smart contracts?**

Simply put, they are pieces of code that execute automatically without the need for third-party institutions like banks or lawyers. It sounds impressive, but this is actually the key reason why Bitcoin and Ethereum diverged.

Bitcoin also has contract functionality, but the problem is that it is not Turing complete—that means it cannot execute certain programming instructions. The designers of Bitcoin intended it to do just one thing: store value.

Ethereum is different. It is not only a tool for storing value but also a platform for decentralized contract execution. This difference determines the entire ecosystem direction of the two chains.

**But here’s a tricky issue**

Blockchains are closed systems; they cannot directly access external information. Want to replace real-world contracts with smart contracts? Not possible—because contracts need real-world data as trigger conditions. What to do? This is the famous "oracle problem."

Oracles act as information intermediaries, feeding off-chain data to on-chain contracts. But you have to trust this intermediary, which again brings us back to the old problem of needing a third party. This is a core challenge that the Web3 field is still working to solve.

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