Abstract: Smart contracts were made famous in the 2017 ethereum blockchain, automating transactions by inserting terms into code which eliminated the requirement of any middlemen. Execution of these contracts is automated, transparent, and secure. Automated contracts provide potent advantages, such as cost-saving, enhanced security, and increased efficiency, which make them integral to decentralized finance (defi), decentralized apps (dapps), and non-fungible tokens (nfts). Smart contracts exceed mere contracts. They enable interoperability of the blockchain with the internet of things (iot) via application logic contracts (alcs) and decentralized autonomous organizations (daos). Despite such promise, some problems persist, from technical difficulties to loopholes in nascent legal frameworks. This article discusses their mechanisms, uses, and limitations and places emphasis on their social implications and future directions.
Keywords: Blockchain Technology; Smart contract, Traditional Contract Decentralized Systems, smart contract security, Internet of Things (IoT), Security, Pay to public key hash (p2pkh), Multi-signature contracts (multisig), Hash time-lock contracts (htlcs), Discrete log contracts (dlcs) Pay to taproot (p2tr).
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