Smart contract

A smart contract can be thought of as a small decentralized program. Smart contracts do not necessarily need a blockchain to run; however, due to the security benefits that the blockchain technology provides, it is now becoming almost a standard to use blockchain as a decentralized execution platform for smart contracts. A smart contract usually contains some business logic and a limited amount of data. Actors or participants in the blockchain use these smart contracts or they run autonomously on behalf of the network participants.

These small programs reside on the blockchain and execute business logic if some specific criteria are met. More information on smart contracts will be provided in Chapter 6, Smart Contracts, which is dedicated to a detailed discussion of smart contracts.