What is a smart contract?

A smart contract is fundamentally a self-executing contract where the terms of the agreement are directly written into code that resides on a blockchain. This unique characteristic allows smart contracts to automatically execute actions when predetermined conditions are met, eliminating the need for intermediaries and reducing the risk of manual errors. The code and the agreements within it are immutable and transparent, reinforcing trust and efficiency in transactions.

The integration of conditions into the code means that once a smart contract is deployed, it will operate autonomously without further human intervention, provided the conditions have been coded correctly. This allows for a diverse range of applications, from financial services and supply chain management to digital identity verification and automated governance. The automation aspect significantly streamlines processes and enhances reliability, making smart contracts a pivotal innovation in the blockchain space.