ELI5: smart-contracts

// eli5

What is a smart contract?

A smart contract is like a robot vending machine on the internet that automatically does exactly what you told it to do [1][2]. Instead of needing a person to check if you followed the rules, the computer checks automatically and makes things happen by itself.

Why do we need them?

Normally, you need to trust a person or company to make sure both sides of a deal follow through—like a referee in a game [1][3]. Smart contracts are like referees made of computer code that can't cheat or take sides, so you don't have to trust anyone else.

What happens when you use one?

You set up the rules in advance (like "give the toy when you get paid"), and once the right thing happens, the contract automatically does what it's supposed to do without anyone needing to push a button [1][5].

Can they be changed?

Once a smart contract is written down in the blockchain, it can't be erased or secretly changed, which makes it super fair and honest [3].