Smart contracts are simple "if-this-than-that" procedures. If the car gets sold from person A to B, than all information that goes along with the car is transfered from A to B. This information about the transaction is stored in the blockchain and person B is now the official owner of the car without any third parties involved in the entire proces.
If you connect a number of smart contracts, you can create a 'Decentralized Autonomous Organization' (DAO). You can think of an organization in which people work together without a central supervisory body. Essentially without hierarchy. Together you determine the rules and these rules are recorded in code. The code then guides you in how you work together.
one of the features that a DAO has is the automatic release of coins to the participants of the blockchain, the use of an own currency and the use of smart contracts within the blockchain. A DAO also has a consensus/voting mechanism. If anyone has an idea for the blockchain it first has to be agreed by the majority of the blockchain participants before it will be integrated. At steem we for example vote on a witness!
A DAO is also open source and allows people to look at the tech without any secrets. Most of the companies do this now a days. It's not only crypto that's open source.
Again, I’d like to point out that i keep my educational posts as short as possible. If you want to make money online with crypto, you don't necessarily need to know this stuff in detail. Knowing what a DAO is, is more than enough!
Don't forget to leave an upvote and follow if you enjoyed my content :)
Best regards,
Sem
