Smart contracts function on blockchain platforms by utilizing decentralized technology to ensure transparency, security, and immutability of the agreements. When conditions coded into the smart contract are met, the contract self-executes, performing actions such as transferring assets or updating records automatically. This process eliminates the need for intermediaries, reducing time and costs. By leveraging blockchain’s distributed ledger technology, smart contracts can operate with enhanced reliability, fostering trust among all parties involved in a transaction.