I'm new to Tezos, and in fact to Bitcoin in general. I have been reading up on it a good bit, though, and I ran across an article on cryptobriefing which states that Tezos, like Ethereum, uses smart contracts.

What exactly is a smart contract - and how does it compare with a "dumb" contract?

1 Answer 1


A smart contract is a small script that is directly stored and executed on the blockchain by bakers for Tezos (and miners in a POW setting).

Smart contracts enable users to handle tokens, derivative tokens (as in ERC20 contracts), conditions, events, etc., in an explicit and automatic way.

A 'dumb' contract is a regular contract written on a piece of paper without the automatic execution. Also smart contracts need to be fully explicit whereas regular contracts leave a lot to interpretation.

A nice primer by the CFTC, a US regulator: https://www.cftc.gov/sites/default/files/2018-11/LabCFTC_PrimerSmartContracts112718.pdf

  • Can you please elaborate on the 'explicit' nature of smart contracts a bit more?
    – DPF
    Feb 2, 2019 at 14:18
  • 2
    Explicit means that the code of a smart contract is public and stored on the chain which has two consequences: it is readable by everyone and it is directly followed in a deterministic way by bakers.
    – FFF
    Feb 2, 2019 at 14:23

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