Smart Contract

A smart contract is a set of rules written in code that automatically carries out the terms of an agreement without needing a trusted third party. Unlike traditional paper contracts, smart contracts are executed and enforced digitally, usually on a blockchain. Bitcoin uses a basic scripting language called Script, which keeps contracts secure but relatively simple. Still, more advanced smart contracts can be created on additional layers or platforms built on top of Bitcoin. These digital contracts enable things like automated loans, scheduled payments, and complex financial products.