A smart contract is a digital, always-on contract that embeds the enforceability of the deal into the programing code. It is an agreement between two or more parties that specifies conditions, penalties, and rules in mathematical form.
This technology could save everyone time, money, and hassle because it can be automated to self-execute predefined terms.
Smart contracts are digital contracts that can execute themselves when specific conditions are met. They are written in code and run on a blockchain network like Ethereum. This makes them reliable, transparent, and secure.
Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into the code. Then, the contract is uploaded to a blockchain, publicly viewable and unchangeable.
Once uploaded, the code cannot be manipulated by either party, making for a transparent and trustworthy transaction.
The first smart contract was proposed in 1994 by computer scientist Nick Szabo, but it was not until 2009 that bitcoin, the first cryptocurrency, was introduced and provided a platform for smart contracts. Ethereum, which launched in 2015, took things one step further by providing a platform for developers to create their decentralized applications (dapps).
Smart contracts provide a number of benefits over traditional contracts. First, they are more secure because they are stored on a public blockchain and cannot be tampered.
One of the key advantages of smart contracts is that they are self-executing. This means that once the contract terms have been met, the contract will automatically execute without any additional input or action from either party involved.
This also eliminates third-party intermediaries, which can often slow down or complicate transactions. Because smart contracts are written in code, there is no room for interpretation or ambiguity.