A smart contract is a computer protocol that stores rules for negotiating the terms of a contract, automatically verifies the contract, and then executes the agreed upon terms. The protocols enforce the outcome of the contracts between parties. Smart contracts are stored chronologically on the associated blockchain.

The blockchain coupled with smart contract technologies removes reliance on central systems between transactiong parties. Untrusted parties can interact directly with each other using smart contracts without the need for a  middleman.