Smart contracts represent revolutionary technology, opening the door to infinite possibilities. By utilizing Bitcoins decentralized ledger network and the built-in scripting language of the contract network, real-world scenarios can now be transformed into code that executes automatically, without the need for intermediaries. Contract coins provide functionality that would technically be unfeasible with Bitcoin. For example, contract coins are the currency used to pay for all smart contract code execution. More generally, contract coins represent protocol equity in the contract network and serve as the voting currency for community-decided feature modifications.
Contract coins are created through the "burning" of Bitcoins, which involves sending Bitcoins to an unspendable address in exchange for contract coins, ensuring their even and fair distribution. In January 2014, over 2,100 Bitcoins were burned, generating approximately 2.6 million contract coins.

Purposes of Contract Coins

As long as they continue to run on the Bitcoin blockchain, custom contract network tokens can fulfill various needs and act as the circulating currency within their system. Unlike regular Bitcoins, custom tokens can represent any value metric.

Currently, contract tokens can be used for:
Successful case crowdfunding and voting
Monetizing access to decentralized application ("DApp") software features
Representing a product or personal brand
Acting as "domain names for the blockchain"
Serving as authentication tokens
Representing digital goods, such as game cards
Acting as proxies for real-world commodities or services (such as paper, biofuels, etc., that can be traded with tokens)
Serving as rewards for valuable time and resources contributed
Providing an educational service to explore blockchain capabilities
Purely for fun

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