Smart Contracts

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Smart contracts allow trusted transactions and agreements between anonymous parties without a central authority, legal system, or external enforcement mechanism. They make transactions traceable, transparent, and irreversible[1].

Here's some easy to understand examples. For example "The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account. More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations"[2]

References
[1] https://www.investopedia.com/terms/s/smart-contracts.asp
[2] https://blockgeeks.com/guides/smart-contracts

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  • 8 months ago by vince