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What is a smart contract?
Code and state executed under a blockchain’s rules.
On Ethereum, a contract associates code and state with an on-chain address. Transactions invoke functions; the network validates execution under its rules. “Smart” does not mean an AI model.
A contract may release an on-chain entitlement when a condition holds. Whether a physical parcel arrived needs external input, such as an oracle, with its own trust assumptions.
Contracts are only part of an application. Interfaces, identity interactions, storage and notifications may remain off-chain. Other chains have their own program models; not every chain is an EVM.
Upgrade and administrator powers depend on the particular design. On-chain execution does not imply that business rules can never change.
Sources and further reading
Check your understanding
Can a contract independently know that a physical delivery happened?
No. External facts require an input mechanism and trust assumptions.
Continue along a learning path
- Understand the layers of blockchainStep 15 of 18
- Understand Ethereum execution and settlementStep 3 of 11
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Terms
- Blockchain
A distributed ledger that links records cryptographically and uses shared validation and consensus rules to establish an accepted transaction history.