What is a smart contract in crypto? A smart contract is a program that automatically does stuff once certain conditions are met. It lives on a blockchain, which is a fancy way of saying it operates in a decentralized system where everything is recorded and can’t easily be messed with. Smart contracts are written in code, and when something triggers the contract — say, sending money, meeting a deadline, or verifying some data — it executes the pre-set rules on its own.

What is a Smart Contract Used For?

Since there are no middlemen, smart contracts are like a “set it and forget it” deal. They’re popular in cryptocurrency transactions, where parties want to interact directly without needing a bank or lawyer to validate everything. They also reduce errors since they do exactly what they’re programmed to do — assuming the person writing the code didn’t screw it up. They can be used to manage supply chains, automate payments, or create decentralized apps. At their core, the appeal of smart contracts is that they’re transparent, tamper-proof, and can save people time and money, although their complexity can sometimes make them a little hard to trust.