Smart contracts are simply programs stored on a blockchain that are executed when predetermined conditions are met. They are usually used to automate the execution of a deal so that all participants can be immediately sure of the result, without the involvement of any intermediary or loss of time. They can also automate a workflow, triggering the next action when conditions are met.

Benefits of smart contracts

•Speed, efficiency and precision.

  Once a condition is met, the contract is executed immediately. Because smart contracts are digital and automated, there is no paperwork to process or time to reconcile errors that often result from manually completing documents.

•Trust and transparency

  Because there is no third party involved and because encrypted transaction records are shared between participants, there is no need to question whether the information has been altered for personal gain.

•Security

  Blockchain transaction records are encrypted, making them very difficult to hack. Also, because each record is connected to previous and subsequent records in a distributed ledger, hackers would have to tamper with the entire chain to change a single record.

•Savings

  Smart contracts remove the need for intermediaries to handle transactions and, by extension, the associated delays and fees.

MzeDex Team