Smart Contract

A computer program that runs on a blockchain network with specific sets of procedures that cannot be changed. Similar to paper legal contracts, smart contracts are agreements written in code between two or more parties that execute autonomously. Smart contracts differ from traditional computer programs because the program is guaranteed to be executed, regardless of by whom. Additionally, they appear to sustain indefinitely as data essentially becomes permanent once confirmed on a blockchain. Second-generation blockchains (e.g. Ethereum) were designed with executing smart contracts at the forefront. This evolution took a step beyond enabling simple payments on the Bitcoin network by designing a general decentralized computing platform. Such a blockchain network that consists of general smart contracts is commonly referred to as a “world computer.”