What is a smart contract?

What is a smart contract?

If you googled for “Smart contracts meaning”, here is a smart contract tutorial, which could be easily titled “Smart contract for dummies’’ and will provide simple answers for you.

Smart contract is a computer code that simplifies the execution of certain agreements and eliminates the need for a middleman. Smart contract and blockchain are related technologies, as the latter is a smart contracts platform. In other words, smart contract is on blockchain.
There are myriads of smart contract applications and smart contract use cases.

Delivery services could be among the smart contract examples: a smart contract can automatically transfer money to a courier once a parcel is delivered. There’s no need to sign any traditional contracts – the sender just fills smart contracts with cryptocurrency and then the smart contract uses coins (bitcoin and smart contract could be an example) in order to handle everything.

In other words, a smart contract executes what’s written into its code when certain conditions are met. It makes transactions transparent, fraud-resistant, faster, and irreversible, and doesn’t require a central authority. It’s just code that helps two parties collaborate without a middleman.

The notion of smart contracts has been talked about for more than 20 years. But it was only with the arrival of blockchain technology that it got the chance for broader utilization.

Smart contracts can be useful for exchanging money, property or other assets, streamlining business processes and avoiding waits for approvals, tracking inventories, automating dividend payments, controlling your personal data, and even fighting cancer. They’re usable in the finance, energy, real estate, healthcare, media, entertainment sectors, and even in government.

Demand for smart contracts is projected to rise along with the development of the Internet of Things. Also, smart contract and ICO are two closely related things as this technology is being used to facilitate token sales.

Still, smart contracts are just taking their first steps and there are still many issues to address, like smart contracts security. Consider a smart contract that has obvious security holes but can’t be fixed quickly. There are also more fundamental questions, like the regulation of such contracts and smart contracts legal issues.