Intelligent Contract Definition
In its simplest form, a smart contract is a computer program that automatically executes the terms of a contract when certain conditions are met. Smart contracts can be used to automate a wide range of transactions, from financial derivatives and real estate transactions to insurance payouts and online auctions.
The defining feature of a smart contract is that it is self-executing, meaning that once the conditions of the contract are met, the contract automatically executes the terms of the agreement. This eliminates the need for a third party, such as a bank or lawyer, to oversee or enforce the contract.
Smart contracts are often written on blockchain, which is a distributed ledger technology that allows for tamper-proof, transparent and immutable records. This means that once a smart contract is written on blockchain, it cannot be changed or deleted. The benefits of using blockchain for smart contracts include increased security and transparency, as well as reduced transaction costs.
While smart contracts can offer many advantages, it is important to note that they are still subject to human error. For example, if a smart contract is incorrectly coded, it could lead to unintended consequences. Therefore, it is important to carefully consider whether or not a smart contract is right for your particular situation.
