SMART contracts
Smart contracts, digital agreements on a blockchain, execute automatically when predefined conditions are met. Operating on “if/when…then…” logic, they automate workflows, ensuring immediate, transparent outcomes without intermediaries. Executed by a network of computers, actions range from fund releases to notifications. Immutable and permission-controlled, smart contracts guarantee secure, unchangeable transactions, with participants defining terms, exceptions, and dispute resolution frameworks. As blockchain technology evolves, organizations offer tools, templates, and interfaces for simplified smart contract creation, enhancing accessibility and usability.
Once a condition is met, the contract is executed immediately. Because smart contracts are digital and automated, there’s no paperwork to process and no time spent reconciling errors that often result from manually filling in documents.
Because there’s no third party involved, and because encrypted records of transactions are shared across participants, there’s no need to question whether information has been altered for personal benefit.
Blockchain transaction records are encrypted, which makes them very hard to hack. Moreover, because each record is connected to the previous and subsequent records on a distributed ledger, hackers would have to alter the entire chain to change a single record.
Smart contracts remove the need for intermediaries to handle transactions and, by extension, their associated time delays and fees.
