A smart contract is a program that runs on a blockchain and acts like a "contract" that automatically executes when specific pre-defined conditions are met.
For example, if Person A and Person B have an agreement set up as a smart contract, the contract will automatically transfer funds from A to B once B fulfills certain requirements.
This process doesn’t require a middleman, enhancing the transparency and trust of transactions. Smart contracts are used not only in finance but also in areas like gaming, real estate, and more.
Smart contracts bring automation and security, ensuring that agreed-upon rules are followed precisely.