The wave that Blockchain technology is making around the world is huge. Bitcoin was the first major Blockchain application and since then most of us have come to a basic understanding of how Blockchain works. However, over the years, this technology has been rapidly growing to include other applications that can be used for myriad purposes and one such Blockchain application that has become quite popular in recent times is Ethereum, which is used to create Smart Contracts.
At Siddhatech, we offer a comprehensive Smart Contract development services. As such, in this post, we’ll take a look at; what is a Smart Contract, how do Smart Contracts work, what are its benefits and the various areas where we can make use of Smart Contracts. So, let’s get started to see how Blockchain Smart Contracts help individuals and businesses.
In simple words, Smart Contracts are a set of computer code (protocols) that runs on the Blockchain technology and comprises of explicit terms & conditions (pre-defined rules) that are established by the consent of the involved parties. Smart Contracts helps to verify, enforce & execute digital transactions in a credible way without the involvement of third parties. This enforces transparency in all dealings, be it the exchange of money, shares, assets, property or anything of value.
A perfect example of Blockchain Smart Contracts is when you require to obtain a document of proof from the court of law. In a traditional scenario, you’d need to first hire a lawyer, pay them and then wait for the document to be given to you. But, with Smart Contracts, you’d be able to eliminate the need for a lawyer, as all you need to do to obtain a document is run the process with Smart Contracts, pay for it and get the document you want.
Furthermore, unlike traditional contracts that just defines the rules & penalties of an agreement, Smart Contracts take this a step forward by automatically enforcing/executing the said rules and obligations. Thus, greatly reducing the risk of fraud and scam.
Smart Contract is a Blockchain application, created with the help of Ethereum, which is a popular Blockchain platform. As stated above, just like a standard legal contract (on paper) that outlines the term of the agreement between two individuals or organizations, Smart Contracts does the same albeit it uses programming languages such as Solidity, Python or GoLang.
It works on a condition-based principle IF-WHEN-THEN and one of the classic Ethereum Smart Contract examples is when buying a property.
Here, the involved parties can set conditions like;
IF/WHEN the X party transfers the property on my name, THEN I’ll pay the sum of money agreed upon. Or IF/WHEN I pay the sum of money agreed upon, THEN the X party will transfer the property on my name.
There is no limit to the conditions/terms you can include in your Smart Contracts. And, it’s only when these set conditions are successfully met, the Smart Contracts would execute and validate your transaction.
Moreover, since these Contracts are stored in a distributed system, both parties can interact with each other in real-time without the involvement of a third-party. This would save a considerable amount of time and money. In addition, these encrypted contracts are stored in a decentralized ledger which ensures that it can’t be deleted, thus eliminating the chance of fraud. It also offers the involved parties the option of anonymity if that’s what they require.
Now that you know the Smart Contract definition and how Smart Contracts Blockchain application work, here is a quick look at the benefits of Smart Contracts you can obtain by shifting to this digital platform from the traditional one.
Since Blockchain Smart Contracts are a self-executing system, it needs to be precise or it might result in an error while executing. This ensures high accuracy. Also, by shifting to Smart Contracts, you’d be able to prevent human errors that come from manually filling out forms.
As a distributed network that works online, Smart Contracts eliminate the need of manually processing each document. This speeds up the execution process, which not only helps save time but also results in quicker decision making.
All terms and conditions included in a Smart Contract are thoroughly checked and agreed upon by all involved parties before the contract is coded. This ensures total transparency at all times. It also eliminates any dispute that may arise later on.
Without the need to involve any third-party, middlemen or intermediary, individuals and business organizations would be able to significantly reduce operational and transactional costs. Thus, saving a lot of money in return.
Greater accuracy, speed and security ensures that all transaction processes get done at a faster rate. This improves time efficiency, enabling you to complete high-value projects swiftly.
Smart Contracts offer the highest level of safety standards as it makes use of the best-in-class data encrypted technology.
This prevents hacking and offers protection from all threats.
Smart Contracts are also eco-friendly, as by going digital you’d be able to reduce the use of paper, thus actively contributing to the ‘go-green’ movement.
Smart Contracts Blockchain application offers an easy storage & backup feature that ensures all records of your contracts are safely stored and can be accessed anytime you want.
This prevents data loss and in case the data does get lost (which is very very rare) it offers you a simple restore option.
Since there is no way to delete or alter information in Smart Contracts once it’s encrypted, it fosters a higher level of trust between the concerned parties. There is also transparency and easy access to all records at all times as it is stored on a distributed ledger, which helps to further encourage confidence between all.
With Smart Contracts, you need to be specific and detailed while establishing terms and conditions. This leaves little room for misinterpretation at a later stage. Thus, helping you forge an agreement based on a clear and direct communication.
Smart Contracts Blockchain application can be used for varied purposes by individuals, business organizations and for the Internet of Things (IoT). Mentioned below are a few areas where Smart Contracts are currently being used for.
The number #1 concern in the healthcare sector is the misuse of patients information. Since most of the clinical data is maintained on paper, private health records are often vulnerable to theft. Thus, here, Smart Contracts can be a valuable aid as it will not only ensure complete security & integrity of all clinical data but it will also make sure that no third-party has access to these private records.
Also, maintaining the numerous healthcare-related records can be cumbersome leading to administrative inefficiency. As such, with Smart Contracts, this issue would also be resolved as it facilitates easy organization of general healthcare management. This includes supervision of all healthcare supplies and drugs to ensure there is no transgression. It will also take care of regulation, compliance and testing needs, limiting the need for any third-party involvement and human error.
As mentioned above, be it renting an apartment, buying a property or selling a piece of land, with Smart Contract you can easily create agreements and make transactions all without paying a dime to brokers, middlemen or real estate agents. This will also terminate instances of fraud, as all terms & conditions will be encrypted leaving no chance for manipulation.
One area where Smart Contracts can be a great aid for Government is the overhauling of the Voting systems. Smart Contracts applications like FollowMyVote which works on Blockchain technology offers a secure online voting platform ensuring accountability and transparency during elections.
By adopting this technology, the government can prevent human error and overcome hurdles of faulty systems. This will help reduce costs significantly and ensure greater security, voter privacy and easy accessibility, which can help boosts the voter turnout.
While bankers are worried about Blockchain, it, nevertheless, can be an amazing resource that can help revamp the structure of the financial world.
One of the major hurdles for most insurance companies is the time-consuming claim process. Since this process is done manually, it leads to not only customer dissatisfaction but also increases the administrative costs. Thus, if insurance companies want to improve and streamline their operations then they should seriously think about using Smart Contracts applications.
With Smart Contracts, an insurance company can automate the claim process by defining terms & conditions or setting pre-agreed parameters, which when met successfully will lead to the release of the exact amount. This will help companies improve customer relationship and trust. Plus, it will reduce the administrative costs, saving more money.
For retailers, supply chain management can be a challenge as it involves a lot of tasks. Ensuring each and every task is done as per specifications may not always be possible leading to theft and mismanagement. As such, in this scenario, Smart Contracts can be your trusted companion. From tracking inventory to managing invoices & reports to monitoring compliance, retailers can achieve a lot more through this technology that too, at reduced costs.
Offering benefits like greater transparency, automation of day-to-day tasks, reducing fraud and helping save money, Smart Contract is just what retailers need to enhance administration and management efficiency.
There is no doubt Blockchain Smart Contracts is the future that’ll bring about the much-anticipated change in the way things are conducted across various industries and platforms. By being an early adopter of this technology, you’ll be able to always stay ahead of your competition.
More importantly, you will be able to provide your customers with enhanced services, which will only lead to more profitability and success for your company.
Thus, become a part of this digital revolution and for further assistance or to know how Smart Contracts can help you contact us right away!
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