SMART CONTRACTS SIMPLY EXPLAINED
Smart contracts are like paper contracts that have been digitised and automated meaning no middleman e.g. lawyers are required to make sure everyone is playing nice.
Think of it like this paper contracts are you at a job with a boss, smart contracts are you as an self employed, If you wanted to hang out with your friends & take time off work you would first have to ask a third-party for permission e.g. your boss. If you wanted to hang out with your friends as an self-employed person you just go no permission is required, paper contracts require the permission or guidance of the parties e.g. lawyers to be executed safely and legally smart contracts don’t.
Two parties decide on the goods they want to exchange e.g., Cryptocurrency they agree on the amounts/rules of exchange and if both parties meet them the smart contract automatically exchanges the goods on their behalf
A Real World Example
if a company were to sell its research data to another business using a smart contract they would program in the settlement time e.g. 30 days and what is being exchanged e.g. the data files and the cryptocurrency payment. If at the end of 30 days both parties have submitted the goods for transfer the contract would execute and exchanged would be completed no lawyers, agents, brokers, escrow or companies etc
Just an easy trust less exchange – Nice!