A smart contract, also referred to as a crypto contract, is a computer protocol that directly controls the transfer of cryptocurrencies or assets between two parties under certain conditions. Like a traditional contract on paper, a smart contract defines rules and penalties around an agreement; however, a crypto contract can automatically enforce the stated obligations because the contracts are stored on the blockchain, a decentralized ledger that underpins cryptocurrencies.
Here is the definition from cointelegraph.com: “A smart contract is a special protocol intended to contribute, verify or implement the negotiation or performance of the contract. Smart contracts allow [individuals] to perform credible transactions without third parties. These transactions are trackable and irreversible. Smart contracts contain all the information about the contract terms and execute all envisaged actions automatically.”
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