Smart Contracts Explained  ›  Lesson 1

What Smart Contracts Are

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About this lesson

Smart contracts are computer programs stored on a blockchain that run when predefined conditions are met. They are designed to reduce manual coordination, make actions more predictable, and create a shared record of what happened. In this lesson, you will learn the core idea behind smart contracts, how they differ from traditional contracts, and why the word “smart” does not mean they can think or make judgment calls.

We will focus on the foundation: what a smart contract is, what it does well, where it can fail, and why it is important to view it as software with rules rather than as a legal substitute for every agreement. Later lessons will go deeper into how they work technically, where they are used, and how to use them responsibly.

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