Smart Contracts Explained

What are Smart Contracts?

Smart contracts are programs stored on a blockchain that run automatically when conditions are met — "if X happens, do Y" — without intermediaries. Ethereum popularized them.

A Simple Solidity Contract

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

contract SimpleStorage {
    uint256 public value;

    function set(uint256 _v) public {
        value = _v;
    }
    function get() public view returns (uint256) {
        return value;
    }
}

Real-World Example

An escrow contract automatically releases payment to a seller only once the buyer confirms delivery — no bank or lawyer needed.

Benefits

• Automatic execution, no middleman.
• Transparent and tamper-proof.
• Trustless — code enforces the rules.

Risks

• Bugs are permanent (code is immutable).
• Famous hacks (DAO) lost millions to vulnerabilities.

FAQs

What language are they written in?

Solidity (Ethereum) is the most common; also Rust (Solana). More in our Blockchain guides.

Can smart contracts be changed?

No — once deployed they're immutable, which is why audits matter.