A smart contract is a set of digitally defined engagements, including protocols on which contract participants can execute those engagements.

Smart contracts have not yet been implemented in the real world due to a lack of a trustworthy execution environment. People have recognized that the underlying technology of Bitcoin, blockchain, can inherently provide a credible execution environment for smart contracts since its inception, and Ether was the first to recognize the fit between blockchain and smart contracts, releasing the white paper "Ether: The Next Generation Smart Contract and Decentralized Application Platform," and has been dedicated to making Ether the best smart contract and decentralized application platform.

A smart contract program is more than simply a computer program that may be run automatically; it is also a system participant. It can accept and store values, respond to incoming messages, and send outgoing messages and values. This program functions similarly to a person who can be trusted to temporarily hold assets while always following predetermined procedures.

Smart Contract Model: A smart contract is a computer program that can process data, receive, store, and send values. It runs on a reproducible, shared ledger.