A smart contract is a computerized protocol that facilitates, verifies, or enforces the negotiation or performance of a contract autonomously when predefined conditions are satisfied. It is a self-activating contract where the terms of the agreement are embedded directly into the code. Upon fulfillment of the conditions, the contract is automatically executed, eliminating the need for intermediaries.
Smart contracts are constructed on blockchain technology, ensuring their immutability and resistance to tampering. This implies that once a contract is executed, it cannot be modified or erased. This characteristic makes smart contracts a more secure and dependable method for conducting transactions.
Smart contracts offer several benefits over traditional contracts. Firstly, they enhance efficiency by eliminating intermediaries, thereby reducing contract execution costs and time.
Secondly, smart contracts offer enhanced security as they are built on blockchain technology. This ensures that the contract is tamper-resistant and cannot be altered or erased post-execution, reducing fraud risk and guaranteeing contract term enforcement.
Thirdly, smart contracts offer greater transparency as they are stored on a public blockchain. This ensures that all contract parties can access and verify its authenticity, reducing dispute risk and ensuring contract term clarity for all parties.
Smart contracts have numerous applications across various industries. One of the most promising applications is in supply chain management. Smart contracts can be used to monitor goods movement across the supply chain and automatically execute payments when certain conditions are met.
Another promising application is in the real estate sector. Smart contracts can automate the real estate buying and selling process, reducing the time and cost associated with real estate transactions.
.svg)
