What are Self-Executing Contracts?
Self-executing contracts, commonly referred to as smart contracts, are digital agreements that automatically enforce and execute the terms of a contract when predefined conditions are met. These contracts operate on blockchain technology, providing a decentralized and secure platform for their execution.
Key Characteristics
- Automation: Self-executing contracts eliminate the need for intermediaries by automating the execution process.
- Immutability: Once deployed on a blockchain, the contract's terms cannot be altered, ensuring the integrity of the agreement.
- Transparency: All parties involved can verify the contract's terms and execution history, fostering trust.
How They Work
Smart contracts are written in code and deployed on a blockchain. They monitor external events or conditions using oracles. When the specified conditions are fulfilled, the code automatically executes the agreed-upon actions, such as transferring funds or issuing tokens.
Use Cases
Self-executing contracts are used in various industries, including finance for automated payments, real estate for streamlined transactions, and supply chain management for tracking goods and services.