What is a Smart Contract?
A smart contract is an automated digital agreement, written in code, that tracks, verifies, and executes the binding transactions of a contract between various parties. The transactions of the contract are automatically executed by the smart contract code when predetermined conditions are met. Essentially, a smart contract is a short program whose inputs and outputs are transactions on a blockchain.
Smart contracts are self executing and reliable and do not require the actions or presence of third parties. The smart contract code is stored on, and distributed across, a decentralised blockchain network, making it transparent and irreversible.
In summary, smart contracts are immutable as a contract cannot be changed, they are distributable and tamper-proof, fast and cost effective, as there is no middle man which saves money and time, and is safe due to encryption.
Cardano is introducing smart contract support in 2021. As a multi-functional environment, Cardano will support the development and deployment of smart contracts using such programming languages as:
- Plutus — a purpose-built smart contract development and execution platform. Plutus contracts consist of parts that run on the blockchain (on-chain code) and parts that run on a user’s machine (off-chain or client code). Plutus draws from modern language research to provide a safe, full-stack programming environment based on Haskell, the leading functional programming language.