Smart contracts are computer-coded protocols that execute automatically when the predetermined conditions are met. They help us to verify, manage, or carry out agreements. Blockchain technology, which powers smart contracts, processes every transaction in a contract, eliminating the need for middlemen to carry out the transactions. Here is a list of 7 major advantages of smart contracts.
- Accuracy: Traditional contracts have a lot of forms and legal documents that need to be manually entered which may cause human errors, but smart contracts are just codes that are automatically executed. By using smart contracts, mistakes caused by manually filling out several forms are eliminated.
- Transparency: When the parties are involved in an agreement or deal, all the terms and conditions are clearly stated in the smart contract. All the parties involved can see and access the whole terms and conditions of these contracts. This makes the transaction completely transparent to all parties involved.
- Trust: As the smart contracts get executed automatically based on the deal accepted. Smart contracts inspire complete confidence. Any chance of manipulation, bias, or error is eliminated by the agreement’s open, secure, and autonomous structure.
- Efficiency: Traditional contracts involve legal authorities and other intermediaries for checking and authorizing, but with smart contracts everything takes place digitally saving us more time and money!
- Paper Free and Sustainable: The unsustainable legacy of the industrial revolution is over, Sustainability is the new mega trend. In that case, unlike conventional contracts, smart contracts are digital and do not involve piles of paperworks thus paving the way for sustainability.
- 6. Backup: Smart contracts are stored in blockchains where every node has a copy of it and every other transaction that has taken place in the blockchain network. So, there is nothing to worry in case of data loss, or single point failure.
- Security: Smart contracts are encrypted so it is robust, secure and immune to attacks. For example, Ethereum uses Keccak256 cryptographic hash function for authentication.
Uses of Smart Contracts
Smart contracts are critical components of blockchain, here are some of the real time use cases of how smart contracts are.
- Electronic voting system: Smart contracts in the electronic voting system address concerns about security, accuracy, and voter privacy. By eliminating even the smallest amount of third party involvement, the protocol eliminates any deliberate fraudulent acts that take place during the election process. Coercion and transparency are both attained simultaneously.
- Health Care: Patients seeking transfer to other medical facilities or additional counsel will be able to consult multiple doctors or specialists and hospitals simply without having to physically transfer their medical records and complete several forms thanks to the distributed digital ledger and smart contracts that preserve data.
- Real Estate: In traditional real estate, both the buyer and the seller are frequently hesitant to transfer ownership before receiving payment, and vice versa. Though the notaries resolve the issue, they also add to the expense and make the ownership transfer process time consuming. But with smart contract’s digital identity management it is easy to process property Ownership Transfer and other leasing issues.
- Supply Chain:
- Making payments: When a predetermined condition is met, a smart contract releases payments.
- Recording ledger entries: It keeps track of changes, including timestamps, human changes, and data from IoT devices.
- Parties involved in the smart contract are notified when manual intervention is required. For instance, an IoT device can warn all parties to take the necessary action when it detects an out-of-range temperature, lowering supply risk etc.
Smart contracts are ubiquitous and can be implemented in any industry for automating the existing procedures. Get in touch with the best blockchain development company, to know how our smart contract development services will help you automate your business and to leverage the power of blockchain. Contact BSEtec for more details and a free Blockchain consultation.