Smart contracts are one of the things made possible by Think of blockchain as a digital ledger that records transactions in a transparent, tamper-proof way. It's a chain of transaction blocks linked chronologically. More technology. Let’s break down the basics.
A smart contract is code that runs automatically when certain conditions are met. Kind of like “if-then” programming. If X happens, then the smart contract executes Y.
For example, say Alicia loans Brad $500. They could create a smart contract that says:
If Brad repays $500 by December 1st, release the loan from escrow to Brad.
If Brad doesn’t repay by December 1st, return the $500 to Alicia.
Once the terms are set, the smart contract handles everything automatically. No need for Alicia to manually check if Brad repaid on time. The code handles it!
Smart contracts provide an efficient way to exchange money, property, shares, or anything of value in a transparent way.