What Is a Smart Contract?

Smart contracts are a new technology that can only be achieved through blockchain. Ordinary, standard contracts cover the terms of the agreement between the parties and are often enforced by law; Smart contracts are digital, stored in the blockchain, and the agreement is enforced using encrypted code.

In other words, smart contracts are just software programs, and like all programs, they execute exactly as the programmer intended. Smart contracts are like programming applications: “Once it appears, execute it”.

Basically through mathematical calculations, smart contracts can negotiate terms in agreements, automatically verify performance, and even enforce agreed terms, all of which do not need to be approved by a central organization. Smart contracts make intermediaries such as notaries, agents and lawyers almost meaningless.