What is the difference between a smart contract and a traditional contract?

A smart contract is a self-executing digital agreement stored on a blockchain like Ethereum. When predetermined conditions are met, it automatically executes without intermediaries. Traditional contracts require lawyers, courts, and trust in third parties to enforce them. Smart contracts are transparent, immutable once deployed, and execute instantly. For example, a smart contract could automatically release payment when goods are delivered, verified by sensors or oracles. However, smart contracts can contain bugs and are irreversible if coded incorrectly. Traditional contracts offer legal recourse but require time and money to enforce. Smart contracts are ideal for straightforward, automated transactions, while traditional contracts work better for complex agreements needing legal interpretation.