Smart contracts are digital contracts that are stored on a blockchain and can be automatically executed when certain conditions are met. They are designed to automate the process of agreement and contract execution, which can help to reduce the risk of fraud and errors. One of the main problems that smart contracts solve is the need for intermediaries to facilitate and enforce contracts. By automating the process of contract execution, smart contracts can reduce the costs and time associated with traditional contract processes, and increase the efficiency and transparency of contract execution.