What is a smart contract?

Smart contracts are a concept that has been around for a long time, but have not been practical until the advent of blockchain technology.

In short, a smart contract is similar to a traditional contract but the terms of the contract are written in computer code and typically autonomously execute once the conditions of the contract have been met.

Ethereum is the most well known blockchain-based platform designed for the creation and execution of smart contracts.

For example, an international sales agreement between two companies may be held in a smart contract that holds the buyer's funds for payment in escrow until the delivery of goods; at which time the funds will automatically be released to the seller. This can help eliminate distrust between two companies, especially if they do not have a previous business relationship.

One of the issues with smart contracts is the difficulty of programming triggers based on external events; e.g. the confirmation of delivery in the above example. External data can be incorporated into smart contracts via smart contract oracles, which the Zap Project & Marketplace hopes to make as intuitive and easy to use as possible.

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