Smart Contract
Programmatic rules executed by the blockchain to enforce agreements without intermediaries.
A smart contract is code that runs deterministically on a blockchain to enforce rules or automate actions. On account-based chains (e.g., Ethereum), contracts are programs with persistent state. On UTXO chains (e.g., Bitcoin Cash), contracts are enforced via script conditions that must evaluate to true for spending.
"An escrow contract holds funds until both parties provide signatures or a timeout passes, at which point funds are refunded."
Smart contracts are transparent and immutable once deployed, which reduces counterparty risk but introduces the risk of bugs. Audits, formal verification, and fail-safes (like time locks and multi-sig) help mitigate issues.
"A timelocked refund branch protects users if a counterparty disappears, allowing recovery after a deadline."
Related Terms
Opcode
→A fundamental element of Bitcoin's scripting language that enables complex transactions.
P2SH
→A script type where the output is locked to the hash of a redeem script, enabling features like multi-sig.
Ethereum Virtual Machine (EVM)
→The Ethereum Virtual Machine (EVM) is the runtime environment for executing smart contracts on the Ethereum blockchain and EVM-compatible networks.
All terms and definitions may update as the Cryptionary improves.
