Like a regular contract, a smart contract forms the terms of an agreement. However, unlike a traditional contract, a smart contract’s terms are stored as code running on a blockchain network.
The key objective of a smart contract is to reduce the need for a ‘middleman’ or intermediary – Smart contracts allow trusted transactions and agreements to be carried out among parties without the need for a central authority.
Because smart contracts are run on a blockchain like Ethereum, they provide both parties with security, reliability, and transparent records.
Once deployed onto a blockchain, smart contracts generally can’t be altered, even by their creator.