Welcome back to our ‘Crypto Made Easy’ series, where we simplify the complex world of crypto so that you can better understand, be informed, and feel good about joining the future of tech, internet, and connectivity.
Smart contracts are self-performing code and protocols that execute a set of instructions. Smart contracts are verified on the blockchain, making them transparent and secure. They are trust-free, meaning they don’t require trust from either party (also known as trust-less in the crypto space), autonomous, and decentralized. Smart contracts cannot be altered after being deployed.
A popular use for smart contracts currently are financial contracts (e.g. loans, derivatives, trading, etc.). Other smart contract protocols could include properly funding projects or individuals, registering ownership of physical items, sending data, or issuing tickets. The blockchain is updated when transactions are executed. Only parties who have been granted permission can see the results. Popular in decentralized finance (DeFi), smart contracts can be bundled into decentralized applications (dApps) to execute more complex functions such as Uniswap and OpenSea.
As blockchain technology continues to grow and scale, people and businesses have been using various contract templates and other online tools to make creating smart contracts more easily accessible.