A smart contract is a self-executing contract with the terms of the agreement between buyer and seller directly written into lines of code, which automatically enforces and executes the terms when predetermined conditions are met.
Understanding Smart Contracts
A smart contract is a digital agreement, executed by a computer program on a blockchain. It automates the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement. It ensures that the agreed-upon terms will be completed once the set conditions are met.
How Smart Contracts Function
Imagine a smart contract as an impartial judge. It oversees agreements, ensuring that all conditions are fulfilled before executing the agreed actions. They are vital for maintaining a trustless system on blockchain networks. This is because they negate the need for a central authority.
- The signatories — the parties involved in the contract.
- The subject of the agreement — the asset or service being exchanged or managed.
- The terms of the agreement — the specific conditions coded into the contract.
Blockchain Platforms Enabling Smart Contracts
Ethereum pioneered the integration of smart contracts, but other networks have since followed. These include EOS, NEO, Tezos, Tron, Polkadot, Solana, and Polygon. Each platform offers unique features to developers and users alike.