What is a smart contract and how does it operate on a blockchain?

A smart contract is a selfexecuting program or code that is stored on a blockchain network. It is designed to automatically execute the terms of an agreement between parties once specific conditions are met. Smart contracts work by using predefined rules and logic to validate and enforce the terms of an agreement, eliminating the need for intermediaries, and increasing efficiency and transparency.

When a smart contract is created, its code is stored on the blockchain network and can be accessed by any node on the network. Once the contract is executed, the blockchain network verifies the code and the terms of the agreement. If all conditions are met, the contract is executed and the result is recorded on the blockchain network. This process ensures that the contract is secure, transparent, and tamperproof, as it is verified by the distributed network of nodes in the blockchain.