In general a contract is an enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. Similarly, in blockchain, we have a concept called Distributed Ledger Smartcontract which is a computer programs or protocol used to automate transactions that are stored on a blockchain and execute in response to meeting certain conditions.
Below are few of the capabilities of Distributed Ledger Smartcontracts:
Accuracy: Smartcontracts are accurate to the limit a programmer has accurately coded them for execution.
Automation: Smartcontracts can automate the tasks/ processes that are done manually.
Speed: Smartcontracts employ computer code to automate procedures, reducing the time needed to complete all activities requiring human contact. Because everything is programmed, the time it takes for the code in the smart contract to run equals the time it takes to complete all of the tasks.
Backup: The shared ledger is maintained by each node on the blockchain, making this service the best possible.
Security: Cryptography can guarantee the assets' security. Even if the encryption is cracked, the hacker will still need to change every block that follows the one that was changed. Please be aware that a small or medium-sized business would be unable to complete this assignment due to its extreme difficulty and computational requirements.
Savings: Smartcontracts reduce costs since they do away with the need for middlemen. Additionally, little to no money is spent on the documentation.
Manages information: Smartcontracts hold information about an application, such as domain registration and membership records, and manage users' agreements.
Multi-signature accounts: Smartcontracts allow for the distribution of funds through multi-signature accounts as soon as all parties have signed off on the arrangement.
