Are smart contracts a viable future of the rapidly developing market?

What is a contract?

  • Introduction to smart contracts
  • Role of blockchain
  1. Online shopping and supply chain: With nearly everything being on our phones these days and online shopping and ordering being the latest trends, a fast system to deal with these transactions is imperative, and blockchain smart contracts are exactly that. The process of registration of orders, the transmission of them to warehouses, and the initializing of the shipping process are no longer manual or fed step-but-step but largely automated. Verification through OTPs and passwords are all triggers that take the process from one stage to another. Once both parties ‘okay’ the transaction, the majority of intermediate steps are carried out automatically.
  2. Copyrighting and proof of ownership: It has now become much simpler for artists and content creators to put their content out there without facing a large magnitude of risk of losing their rights or relenting control to the bigger sharks. Distributive and irreversible records of blockchain provide a large level of objectivity, and claiming rights has become less complicated. In addition to this, the terms that each firm or creator can set are varied. This means some licenses can be pre-given to readers, whereas some other uses might be prohibited and, in some cases, even punishable. The process of spotting controversies and a portion of verification becomes computerized instead of manual.
  3. Insurance: The way smart contracts in insurance work is the conditions are verified on computers, and when they are met, the compensation or agreed upon payout is automatically processed. One sub-example of this would be flight delay insurance. Airlines often collaborate with blockchain to set up flight delay insurances where once a passenger is registered and the flight is shown to be delayed, payouts are automatically granted. This not only saves a massive amount of time and labor but also increases the goodwill of airlines and consumer trust.

Industries that are using Smart Contracts

  • Getting copyrights and patents: verification of the authenticity of claims is faster, more detailed, and more efficient when they are computerized, and that is about what happens when a claim is made on the blockchain. To check for explicit or implicit plagiarism is carried out.
  • Protection of intellectual property: as discussed in the previous column. This comes into the act when an approved right is infringed upon. Verifications take place to determine the validity of the claim.
  • Transfer of money or assets: cryptocurrency or even bank money can be transferred on a click without third party involvement, much like depositing or withdrawing money at an ATM.
  • Theft protection: sale of non-existent, pre-sold, or unregistered products is not possible on the blockchain or smart contracts. Hence they have found a use in law enforcement and are used in catching thefts since some loophole is always left behind.
  • Authentication: from the granting of diplomas to job certificates, many of these written contracts are generated via smart contracts.
  • Insurance: also, as discussed in the previous column. Processing payouts is automated on the fulfillment of criteria.

The Upside

  • The level of objectivity smart contracts bring is unparalleled. Terms and conditions are not left upto interpretation, and, especially in cases of insurance, the customer is subjected through much less physical and mental trauma. This also makes it easier for content creators since the concrete proof is much more easily available.
  • Time taken is minimized. Every procedure is not carried by people; machines are doing it by using a pre-fed algorithm.
  • The absence of third party intervention minimizes human resource used.
  • The traceability is high. Hence every action can be tracked and checked in case disputes arise.

The Downside

  • Since actions on the blockchain are irreversible; there is no room for error. Changes cannot be made post-facto and fallback mechanisms need to be completely separate.
  • Contracts remain untampered only if the coding is perfect. Hence flawless programs are a prerequisite to dependency on smart contracts, which results in high dependency on programmers. Unlike traditional contracts where technological knowledge was not a prerequisite, only coders can make these contracts.
  • Lawyers are not completely eliminated. After a point, coders working for large companies also need lawyers for legal input.

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A leading blockchain,mobile apps & software development company, started by Ex VP of Goldman Sachs, USA and Ex iOS Lead Engineer of Citrix www.solulab.com