What Is a Smart Contract?

What you’ll learn

• •A smart contract automatically executes predefined rules once its conditions are met — no human approver in the loop.
• •The vending machine analogy captures it well: insert the right input, get the mechanically enforced output, every time.
• •Because it runs on a decentralised network, a contract's code is typically public and its execution is enforced by the network, not a company.
• •'Code is law' means bugs execute exactly as written too — there's no customer support to reverse a resulting loss.
• •Real hacks have come from attackers exploiting flaws the contract's own logic technically permitted.
• •Prefer well-established, heavily audited protocols; treat brand-new contracts promising unusually high returns with real suspicion.