What is a smart contract and how does it function on the blockchain?
A smart contract is a self-executing contract with the terms directly written into code, running on a blockchain. It automatically enforces and executes agreements when predetermined conditions are met. This decentralizes traditional contract enforcement, eliminating the need for intermediaries. As a result, transactions become more efficient, secure, and transparent. Smart contracts are immutable, meaning the terms cannot be altered once deployed, providing a high level of trust among parties. They are widely used in applications such as decentralized finance (DeFi) and supply chain management, ensuring streamlined processes.