Smart contracts automate transactions by using blockchain technology to enforce agreements without the need for intermediaries. These self-executing contracts are programmed with specific conditions, and once those conditions are met, the contract automatically executes its terms. This automation enhances transaction efficiency, reduces costs, and increases transparency by providing a tamper-proof record of the contract. Smart contracts are widely used in areas such as finance, real estate, and supply chain management, allowing for more secure and streamlined operations. Their ability to automate contractual processes represents a significant advancement in digital transactions.