1. Automation: Smart contracts are programmed to execute automatically when certain conditions are met, eliminating the need for manual processing of transactions and reducing the risk of human error. For example, a smart contract could be used to automatically transfer funds from one account to another when certain conditions are met.
2. Transparency: Smart contracts are stored on a blockchain, which is an immutable and transparent ledger. This ensures that all parties involved in a transaction have access to the same information and cannot alter or tamper with it. For example, a smart contract could be used to track the ownership of a digital asset or to store the terms of an agreement between two parties.
3. Security: Smart contracts are secured using cryptography and are resistant to external interference. This makes them much more secure than traditional contracts, which can be easily altered or manipulated. For example, a smart contract could be used to securely store and transfer funds between two parties without the risk of fraud or manipulation.