A smart contract is a program stored on a blockchain that automatically executes when predefined conditions are met.
A smart contract's code is public and immutable once deployed. When conditions are satisfied, it runs automatically without a middleman.
A smart contract could automatically release payment to a seller when a buyer confirms delivery, removing the need for a trusted third party.
Smart contracts power DeFi, NFTs, token creation and decentralized applications, which is why Ethereum and similar chains exist.
Because code is law, a bug in a smart contract can be exploited and there is usually no way to reverse the damage.
Smart contracts are the building blocks of decentralized applications, enabling trustless automation at scale.