Introduction
Smart contracts are self-executing agreements on the blockchain that run when predefined conditions are met—no intermediaries required. They enable everything from DeFi to NFTs and DAOs.
How Smart Contracts Work
Smart contracts are written in code and stored on the blockchain. When triggered, they execute automatically.
🔹 Example: A vending machine is like a smart contract—you insert money, and it delivers a snack. No human intervention needed!
Key Features of Smart Contracts
✅ Automation – No manual processing; contracts execute instantly.
✅ Trustless – No need to rely on third parties (banks, lawyers).
✅ Transparency – Everyone can see and verify the contract’s code.
✅ Security – Once deployed, they cannot be altered.
Use Cases of Smart Contracts
💰 DeFi – Powers lending, borrowing, and decentralized exchanges.
🎨 NFTs – Enables ownership and transfer of digital assets.
🏢 DAOs – Decentralized organizations governed by smart contracts.
🏠 Real Estate & Legal Agreements – Automates property transactions.
Risks & Challenges
⚠ Bugs & Exploits – Poorly written contracts can be hacked.
⚠ Irreversibility – Once executed, contracts cannot be changed.
⚠ Legal Uncertainty – Smart contracts operate outside traditional legal systems.
Conclusion
Smart contracts are a core innovation of blockchain, enabling automation and transparency across industries. As technology advances, their impact will only grow.