What is a smart contract on Ethereum?
A smart contract on Ethereum is a computer protocol that facilitates, verifies, and enforces the negotiation or performance of a contract.
Smart contracts allow users to create digital agreements that are enforced by the blockchain network. They are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. Smart contracts enable trustless transactions between two parties without the need for a third-party intermediary.
They are stored on the Ethereum blockchain and are executed when certain conditions are met. This means that once an agreement is made, it cannot be changed or reversed unless both parties agree to do so. Smart contracts can be used for a variety of applications such as creating digital tokens, issuing shares in a company, creating decentralized autonomous organizations (DAOs), and more.
They can also be used to automate payments, manage digital assets, and store data securely on the blockchain. Smart contracts have become increasingly popular due to their ability to provide trustless transactions and reduce costs associated with traditional contractual agreements.
