What are Smart Contracts in Blockchain?
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They run on blockchain technology, which ensures transparency, security, and immutability.
Key Features of Smart Contracts
- Automation: Smart contracts automate processes, reducing the need for intermediaries.
- Security: They use cryptographic security to prevent unauthorized changes.
- Transparency: All parties can view the contract and its execution history on the blockchain.
- Cost-effective: By eliminating intermediaries, smart contracts can save time and costs.
How Do Smart Contracts Work?
Smart contracts consist of code that automatically executes actions when predetermined conditions are met. Once deployed on the blockchain, they cannot be altered, ensuring trust among participants.
Use Cases of Smart Contracts
- Financial Services: Automated payments and loans.
- Supply Chain Management: Real-time tracking of goods.
- Real Estate: Automated property transfers.
In summary, smart contracts revolutionize the way agreements are executed and enforced, offering numerous advantages across various sectors.