A global shipping company implements a Blockchain system to track cargo. They utilize 'Smart Contracts' within this system. What is the primary function of a Smart Contract in this context?

Answer options:

To provide legal representation in international trade disputes.

To automatically execute predefined actions, such as releasing payment, when specific conditions are met.

To encrypt the physical cargo containers using IoT locks.

To translate legal documents into different languages for customs clearance.

How to approach this question

Recall the definition of a smart contract in blockchain technology. It's about automation based on conditions.

Full Answer

B.To automatically execute predefined actions, such as releasing payment, when specific conditions are met.✓ Correct

A smart contract is a self-executing program stored on a blockchain that runs when predetermined conditions are met. It automates the execution of an agreement so that all participants can be immediately certain of the outcome, without an intermediary.

Common mistakes

Assuming 'smart contracts' are legally binding PDF documents generated by AI.

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