What is a Smart Contract?

A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and agreements exist across a distributed, decentralized blockchain network. Smart contracts allow trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.

Frequently Asked Questions

• What is a Smart Contract?
• A smart contract is a self-executing contract with the terms of the agreement directly written into lines of code. They run on blockchain technology and are designed to automatically enforce and verify the contract’s compliance.
• How does a smart contract work?
• Smart contracts work by encoding the terms and conditions of an agreement into blockchain-based code. Once the pre-defined conditions are met, the contract automatically executes the agreed-upon actions without intermediaries.
• What are the benefits of using smart contracts?
• Smart contracts offer several benefits including immutability, transparency, security, and automation, reducing the need for intermediaries and minimizing the risk of fraud or manipulation.
• Which platforms support smart contracts?
• Ethereum is the most popular platform for smart contracts, but other blockchain platforms like Binance Smart Chain, Cardano, and Solana also support smart contract functionality.
• Are smart contracts legally binding?
• Smart contracts can be legally binding, depending on the jurisdiction and the nature of the agreement. They must meet the legal requirements of a traditional contract such as mutual consent, offer, acceptance, and consideration.