Smart contracts are self-executing code that enforces agreements without intermediaries. They’re transforming how humans interact and exchange value.
What Are Smart Contracts?
Programs running on blockchain that execute automatically when conditions are met. Once deployed, they’re immutable and transparent to all participants.
Key Advantages
- Automatic execution (no delays)
- Transparent (everyone can see terms)
- No intermediaries (no lawyers, no brokers)
- Immutable (can’t be changed after deployment)
- Cheaper (no middleman fees)
Use Cases
Insurance: Claims pay automatically when conditions are met
Real Estate: Property transfers automatically on payment
Loans: Collateral automatically liquidated if price drops
Escrow: Funds held and released automatically
Risks
Once deployed, bugs are permanent. “Code as law” means mistakes are unforgiving. Security audits are essential.
The Future
Smart contracts will power most agreements and transactions. Legal contracts will be supplemented or replaced by code.
Tags: smart contracts, Ethereum, blockchain contracts, Solidity, DeFi protocols