Smart contracts utilise a cryptographic code, originally developed by Nick Szabos in 1994, to control how and when the needs of an agreement are met and released, additionally new development of smart contracts allow for automation of the smart contracts.

Blockchain technology allows for smart contracts to be run on many different computers so that not one singular has control of the contract and can change the conditions. Smart contracts also allow for multi-signature accounts without the need for third party involvement and can automatically enforce obligations of the agreements made.