A simple example of a Smart contract could be compared to vending machine

A simple example of a Smart contract could be compared to vending machine.

Step 1 . individual inserts cash into the vending machine to make a certain purchase
Step 2. the money inserted triggers an event where the vending machine enables
the individual to key in the code for the item they want to purchase
Step 3. individual makes the selection for the desired item on the keypad
Step 4. the vending machine then executes the selection and released the product
with correct change if any is due
Step 5. the individual collects the product and any owed change
Step 6. The transaction is successfully completed
Step 7 both parties benefited from automated transaction

Smart contracts operate on the same principle – code is designed to trigger a response when certain agreed conditions are met, transaction rules are enforced and verified and the transaction is processed.

Benefits of Smart contracts
• Trust – no third-parties are needed and this ensures full control over the agreements
• Accuracy – Terms and conditions are recorded in explicit detail
• Transparency – all parties involved can view the details of the Smart contract at any time
• Security – Smart contracts that run on the Blockchain can be executed instantaneously
• Security – Smart contracts will use the same security that crypto currencies use
• Paper free – no paper required for Smart contracts – very little impact on the environment