What is a Bitcoin smart contract?

A Bitcoin smart contract is a digital agreement written into a computer code on the blockchain network. It is self-executing and self-enforcing, meaning that it carries out the terms of the agreement without any external interference. A Bitcoin smart contract is usually set up to perform a certain task when certain conditions are met. For example, a smart contract could be used to transfer funds between two parties when a certain set of criteria is met, such as when a certain price is reached on a cryptocurrency exchange. Smart contracts also enable the creation of a range of decentralized applications, such as decentralized finance (DeFi) or non-fungible tokens (NFTs).