What is Smart contracts?
Smart contracts: are self-executing programs
stored on a blockchain that automatically carry out agreements when predefined conditions are met. Here’s a detailed breakdown:
What Are Smart Contracts?
Smart contracts are digital agreements written in code that execute automatically when certain conditions are fulfilled. They eliminate the need for intermediaries like banks or lawyers, making transactions "faster, cheaper, and more secure".How Do Smart Contracts Work?
Predefined Rules → The contract contains "if/when…then" conditions.
Blockchain Execution → Once conditions are met, the contract executes automatically.
Immutable & Transparent → Transactions are recorded on the blockchain, ensuring security and trust.
- Key Features of Smart Contracts
Automation → No manual processing; everything happens instantly.
Security → Encrypted and stored on a decentralized network.
Trustless Transactions → No need to trust a third party.
Cost-Efficient → Eliminates middlemen, reducing fees.
Tamper-Proof → Once deployed, contracts cannot be altered.
- Real-World Applications
Finance (DeFi) → Automated loans, insurance, and trading.
Supply Chain → Tracking goods transparently.
Healthcare → Secure patient records and insurance claims.
Gaming & NFTs → Ownership verification and automated rewards.
Legal Agreements → Digital contracts without lawyers.
- Challenges of Smart Contracts
Code Vulnerabilities → Bugs can lead to security risks.
Legal Uncertainty → Not recognized in all jurisdictions.
Scalability Issues → Blockchain networks can be slow.