What Is the Primary Difference between a Traditional Contract and a Smart Contract?
A traditional contract is a legal document enforced by law and human judgment, requiring intermediaries for trust and execution. A smart contract is self-executing code deployed on a blockchain.
It automatically enforces the terms and conditions without human intervention, making it trustless and highly efficient for digital transactions. The latter removes the reliance on external legal systems.
Glossar
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.
Intermediaries
Facilitator ⎊ In cryptocurrency derivatives, options trading, and financial derivatives, a facilitator acts as a crucial bridge connecting counterparties, particularly in decentralized or over-the-counter (OTC) markets where direct interaction may be limited or complex.
Gas Fees
Mechanism ⎊ Gas fees represent the computational cost required to execute transactions or smart contracts on a blockchain network, particularly Ethereum and its Layer-2 solutions, functioning as a deterrent against denial-of-service attacks and a reward for network validators.