Smart Contracts are self-executing contracts with the terms of the agreement directly written into code. They are stored on a blockchain and automatically executed when the pre-defined conditions are met, providing transparency and immutability. This automates contract execution and reduces the need for intermediaries.
Smart contracts operate on simple “if/when…then…” logic. For example, a smart contract could be programmed to execute a payment only when a specific condition is fulfilled, such as the delivery of goods.
Once the conditions are verified by the network of computers (nodes) on the blockchain, the contract automatically carries out its actions, such as transferring funds or registering an asset.