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Smart contracts automatically execute, control, or document agreed actions using computer code and transaction protocols.
A smart contract is a computer program or transaction protocol designed to automatically execute, control, or record actions according to predefined contractual terms. On decentralized platforms such as blockchains, it can manage digital assets, enforce rules through code, and document transactions without relying entirely on a central administrator. Smart contracts are widely associated with cryptocurrencies, especially Ethereum, and support applications such as decentralized finance and non-fungible tokens. The main objectives of smart contracts are to reduce dependence on trusted intermediaries, lower arbitration and transaction costs, limit fraud, and minimize malicious or accidental exceptions. However, a smart contract is not automatically a legally binding agreement; it is distinct from a smart legal contract, which combines machine-readable code with the legal elements required for enforceability. Once deployed on many blockchains, smart contracts are difficult or impossible to modify, so security vulnerabilities and coding errors can have serious consequences.
Smart contracts automatically execute, control, or document agreed actions using computer code and transaction protocols.
Their objectives include reducing reliance on intermediaries, arbitration costs, fraud losses, and unintended exceptions.
Ethereum smart contracts are a foundation for many decentralized finance and non-fungible token applications.
A technical smart contract is not necessarily a legally enforceable agreement; smart legal contracts additionally satisfy applicable legal requirements.
Blockchain-based smart contracts are generally transparent and tamper-resistant, but their immutability can make software bugs and security vulnerabilities difficult to correct.
A computer program or transaction protocol that automatically executes, controls, or records actions according to predefined contractual terms.
A legally enforceable agreement that incorporates terms implemented or expressed in machine-readable code.
A distributed digital ledger that records transactions and can host and execute smart contract code.
A third party traditionally relied upon to verify, administer, or enforce a transaction or agreement.
A blockchain platform that supports general-purpose smart contracts, commonly written in Solidity and executed by the Ethereum Virtual Machine.
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