What Is A Smart Contract in Blockchain, its Advantages, and How Does it Work?

If you’re new to the world of blockchain and cryptocurrencies, you may have been hearing buzzwords such smart contract, DeFi, etc., often thrown around. So what’s this smart contract that 'techy guys' in the crypto and blockchain space are talking about?

Source: RODNAE Productions

First, a smart contract isn’t far from your everyday contract that establishes an agreement between you and someone else or another party. However, it’s got a lot more advantages!

Let’s immerse ourselves into one of the smartest ideas ever conceived in the Blockchain.

So What Is A Smart Contract?

In simple terms, a smart contract is a digital contract that is automatically executed after some preset conditions or terms of an agreement have been met. Smart contracts are typically collections of codes and data, computer programs, or transaction protocols. When this contract is stored and run on a blockchain, it becomes a smart contract on a blockchain.

Therefore, a smart contract on a blockchain is a decentralized application stored in a specific address on a blockchain (like Ethereum, Polkadot, or Algorand) that executes itself when predetermined terms and conditions are met. If you’ve ever…