A smart contract—a digital agreement stored on a blockchain network and programmed to execute automatically when predetermined conditions are met. These self-enforcing contracts encode the agreement terms between seller and buyer directly into lines of code. Operating on a decentralized blockchain, smart contracts help several parties achieve collective outcomes promptly and accurately.
Smart contracts are not limited to a single condition. In fact, a single smart contract can include multiple conditions, showcasing their versatility. Furthermore, an application can utilize several smart contracts to support interconnected processes, demonstrating their potential in a variety of scenarios.
Multiple languages, such as Ethereum's Solidity language, are available for programming smart contracts, one of the most popular. Often, these contracts involve multiple independent parties who may not know or trust each other. To solve this, the smart contract defines exactly how users can interact with it, including:
- • Who can interact with the contract?
- • When interactions can occur.
- • What inputs result in what outputs?