A smart contract is a simple computer program that facilitates the exchange of valuable assets between two participating parties. It consists primarily of the terms and conditions that are mutually agreed on between the two parties. Smart contracts are immutable, which means once a smart contract is executed, it cannot be modified, and any transaction done on top of it is registered permanently. Smart contracts experience zero downtime, where decentralized apps never go down. They are secured using cryptography, which makes it fault-tolerant against hacking attacks and false activities. The transfer of assets takes place in a transparent and trustworthy way; moreover, the identities are completely secured on the Ethereum network.
In traditional contract systems, an agreement is signed, and then one has to trust intermediaries or central authorities for its execution, which may lead to data tempering. While, on the other hand, Ethereum smart contracts removes the risk of any data manipulation.