What is the predefined business logic with in a blockchain called?

Question: What is the predefined business logic with in a blockchain  called?

Blockchain is a technology that allows multiple parties to share and verify data without relying on a central authority. One of the key features of blockchain is that it can execute transactions according to predefined rules, known as smart contracts.

A smart contract is a piece of code that runs on the blockchain and defines the conditions and outcomes of a transaction. For example, a smart contract can automatically transfer funds from one account to another when a certain event occurs, such as the delivery of a product or the completion of a service.

Smart contracts enable trustless and transparent transactions, as they are immutable, verifiable and enforceable by the network. They also reduce transaction costs and intermediaries, as they eliminate the need for manual verification and third-party involvement.

However, smart contracts also have some challenges and limitations. For instance, they require a high level of programming skills and security awareness, as any bug or vulnerability can have serious consequences. They also depend on the quality and availability of external data sources, such as oracles, which provide information from the real world to the blockchain. Moreover, they may face legal and regulatory uncertainties, as they may not be recognized or enforced by existing laws and jurisdictions.

Therefore, smart contracts are a powerful tool for implementing predefined business logic on the blockchain, but they also require careful design, testing and governance to ensure their reliability, efficiency and compliance.