Smart contract is a computer program that automatically executes and controls the fulfillment of agreement conditions between two or more parties. It is based on blockchain technology, which ensures security and transparency.
Smart contracts allow parties to make transactions without intermediaries such as banks or government institutions. They are executed automatically when certain conditions, written in the contract code, are met. These conditions can be anything, from transferring a specific amount of money to performing a specific action.
Advantages of smart contracts
Smart contracts have several advantages.
- Firstly, they eliminate the need to trust the other party since all conditions are recorded in the code and executed automatically.
- Secondly, they provide transparency as all transactions and conditions are recorded in the blockchain and are available for viewing.
- And finally, smart contracts help reduce transaction costs and expedite the process of executing a deal.