A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They are a type of Ethereum account that can define rules, like a regular contract, and automatically enforce them via the code. Smart contracts work by following simple “if/when…then…” statements that are written into code on a blockchain. A network of computers executes the actions when predetermined conditions have been met and verified. Smart contracts can be used to automate the execution of an agreement so that all participants can trust the outcome without the need for a central authority, legal system, or external enforcement mechanism. Smart contracts are commonly associated with cryptocurrencies, and the smart contracts introduced by Ethereum are generally considered a fundamental building block for decentralized finance (DeFi) and NFT applications. Smart contracts can help transform traditional business transactions and can be used for everything from loans and insurance to logistics and gaming.