What is a characteristic of a smart contract?

A smart contract is a self-executing contract with the terms of the agreement directly written into code. It operates on a blockchain, which allows it to run automatically when pre-defined conditions or rules are met, without the need for human intervention. This automated execution is one of the key characteristics that differentiates smart contracts from traditional contracts.

The automation eliminates the need for intermediaries or third parties to enforce the contract, thereby streamlining transactions and reducing costs associated with contract enforcement. The code is immutable once deployed, ensuring that the terms cannot be altered without agreement from all parties involved.

This characteristic underscores the efficiency and trust that can be achieved through the use of smart contracts, as they reduce the risk of human error and enhance trust in the execution process.