What Is a Smart Contract?
A smart contract is a self-executing program that automates the actions required in a contract or agreement. In other words, when the transaction details between contract parties are recorded as code on the blockchain, the smart contract system automatically executes the contract when the specified conditions are met.
In traditional digital transaction systems, transactions were conducted through trusted third parties. As a result, individuals incurred costs and had no way to protect their assets if there were security or other issues with the third-party system.
On the other hand, smart contracts are scripts that automate specific conditions in a contract between two parties, allowing transactions and agreements to take place digitally without the need for central authorities, legal systems, or external enforcement mechanisms.
Smart contracts do not contain legal language, terms, or agreements. They only include code that executes actions when specified conditions are met.
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