Smart contract (smart contract) is the general name of algorithms designed to conclude and maintain self-executing contracts in the blockchain environment.
Smart contracts make it possible to carry out confidential transactions without the participation of intermediaries in the person of banks or the state. In addition, such transactions are transparent and irreversible.
Smart contracts not only contain information about the obligations of the parties and sanctions for their violation, but also automatically ensure the fulfillment of all conditions of the contract.
In simple words, a smart contract is an ideal intermediary in concluding a transaction that will not deceive and ensure that the conditions set for all parties are met. Moreover, the underlying cryptography of smart contracts provides a higher level of security than traditional law-based contracts. Smart contracts can reduce transaction costs, as well as eliminate the risks of ambiguous interpretations of conditions or unfair court decisions.
Advantages of a smart contract:
- Autonomy. You do not need a notary or broker to conclude a transaction
- Reliability. The encrypted contract is on the blockchain
- Saving and speed. There is no need for many intermediaries, and the process itself is automated
- The accuracy. Automation reduces the chance of making a mistake.
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