A smart contract is a self-executing contract with the terms of the agreement between buyer and seller written into code. The code is stored on a blockchain, which is a public ledger. When both parties agree to the contract terms, the code is executed, and the transaction is completed automatically. A smart contract eliminates the need for a third party to act as an intermediary in transactions. This can reduce costs and increase efficiency by streamlining escrow and title insurance processes. Additionally, because data on a blockchain is decentralized and tamper-proof, it can be used to securely store information about contracts or other sensitive data.