what are smart contracts

Smart contracts are computer programs that run on a blockchain network and execute predetermined conditions when they are met. They are self-executing and automate the execution of an agreement, removing the need for intermediaries and associated time delays and fees. Smart contracts are tamper-proof and irreversible, and they permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. Smart contracts are used to manage and enforce intellectual property rights, simplify real estate transactions, and automate workflows. Ethereum has smart contract capabilities inherent to its blockchain, and the Bitcoin blockchain received smart contract abilities after its Taproot upgrade. Smart contracts are not legally binding contracts, but they are a fundamental building block for the Web3 industry and the foundation for decentralized finance, non- fungible tokens, gaming, and other applications that have gained prominence in Web3.