Business and IT Glossary  > Smart Contract

Smart Contract

Smart contracts are a way to develop an enforceable contract, the terms of which can be monitored, inspected, and enforced by the parties involved. Powered by blockchain technology, smart contracts essentially have agents or bots capable of monitoring and enforcing the contract.

In financial trading, a smart contract application could be developed, allowing for automated trades based on changes in economic conditions. In many cases, a smart contract may also call on terms from a separate smart contract (e.g., a standard trader agreement that dictates terms of payment).

In the real estate industry, there is tremendous potential for smart contracts. Smart contracts could eliminate the need for escrow services and automatically move a loan process forward when approvals are triggered. This will be similar to what digital lending apps do today.

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