A smart contract is a computer protocol designed to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts are found within blockchain networks and enable credible transactions to be conducted without a third party. These transactions are traceable and irreversible stored on the blockchain. Various cryptocurrencies have implemented types of smart contracts.
“Smart contracts” allow trustworthy transactions and agreements to be made between different, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.
The second largest public blockchain network, Ethereum, represents a smart contract platform. Ethereum is a decentralized blockchain protocol designed to execute smart contracts and build decentralized applications (dApps) on a distributed computing platform. Ethereum uses the internal cryptocurrency Ether (ETH) as a means of payment for transaction processing, which is handled by participating computers.