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What, When and Why of Smart Contracts in BlockChain!

Kirit Goyal 585 Comments

[vc_row][vc_column width=”2/3″][vc_custom_heading text=”Introduction to Smart Contracts in BlockChain?” use_theme_fonts=”yes”][stm_post_details][vc_column_text]The incorporation of smart contracts in blockchain is expanding with each passing day. As blockchain is touted as cheap, fast, and way more secure than the traditional systems, firms belonging to varied industries are incorporating smart contracts in blockchain. They are acknowledging the multitudinous benefits of consolidating smarts contracts in blockchain technology.

Smart contracts, digital contracts or self-executing contracts are saved on the decentralized ledger. The contracts are converted to computer codes, saved and distributed in the entire network of computer.

What are smart contracts?

The simplest way of explaining smart contract is that it is a fragment of code that is hoarded in the blockchain network of every participating database. The contract carries the conditions that are agreed upon by all the involved parties. On meeting the recommended conditions, the actions are exerted.

The contracts help in exchanging money, shares, property, etc, in the most crystal-clear manner. Using smart contracts does not involve any role of any middleman.

Smart contracts are also called as crypto contracts. Basically, it is a computer program that regulates digital currency transfer or transfer of assets between the involved parties under the applied terms and conditions.

A noticeable thing about smart contracts is that not only does it define the terms and penalties of the agreement, but also, it automatically compels the obligations. This happens by taking the data as input, designating value to the information via the rules defined in the contracts, and then implementing the actions demanded by the contract.

Smart contracts in blockchain

The smart contracts are stored in blockchain. This ensures the security of the contracts as it is impossible to tamper data saved in blockchain. As the contract is saved on each and every computer in the network, the contracts need to be executed and derive the same result.[/vc_column_text][vc_column_text]

Use of smart contracts

As already mentioned, various fields and industries are using smart contracts. The numerous of benefits offered by the use of this latest technology has taken the world by storm. Not just banks and businesses, but other industries like healthcare too, are coming forward to use this breakthrough inception. Some examples include:

  • Use of Smart Contracts in Management

The transparent, accurate, and automated system of blockchain technology enhances security, communication as well as efficiency. The blockchain ledger irons all the disparities and divergences. This keeps settlement delays at bay.

  • Use of Smart Contracts in Government

Smart contracts pay a pivotal role in securing the voting system. It offers a secure system for voting. The ledger-protected votes always require decoding and computing powers to become accessible. This makes them immensely secure.

  • Use of Smart Contracts in Automobile

Smart contracts can be a boon for the automobile industry. They could help in detecting the culprit of a crash. This could also help the automobile insurance companies to charge the rates on the bases of the conditions under which the customer operates their automobiles.

  • Use of Smart Contracts in Supply Chain

In paper-based systems of supply chains, the forms go through many processes for approval. This increases the susceptibility to fraud and loss. This common and sensitive issue has long been countered by the use of blockchain technology. The use of smart contracts in blockchain offers tremendous security and accessibility to all the associated parties. This automates tasks as well as payment.

The transparency offered by incorporating blockchain in the supply chain also helps in building trusts between the involved parties.

  • Use of Smart Contracts in Real Estate

Use of smart contracts in real estate multiplies the profit. By using smart contracts in the blockchain, you cut all the extra cost involved in paying the middleman and others. Here, the ledger directly cuts the cost.

While using smart contracts, you just need to pay through bitcoin and encode the contract on the ledger. It will reach everyone. This benefits real estate agents, brokers, as well as hard money lenders.

  • Use of Smart Contracts in Healthcare

One can easily store all the personal health records on blockchain with the private key. This limits the access to specific people only. This strategy helps in tracking whether the research is carried out by HIPPA laws. Surgery receipts can be saved in blockchains. They are automatically sent to the insurance agencies as proof-of-delivery.

Smart contracts also simplify healthcare management like regulation compliance, supervising drugs, regulating the healthcare supplies and testing results.

Benefits of smart contracts in the blockchain

The benefits of smart contracts in blockchain include:

  • Security and safety

Using smart contracts in blockchain is a sure-shot way of ensuring security. As already known, no tempering can be done in the blockchain. It keeps the documents safe.

  • No involvement of a third person

With the use of smart contracts, there is no need of the third person like a broker or a lawyer. In the absence of a third person, there is no space for any sort of manipulation. The execution is entirely managed by the network.

  • No fear of losing documents

The documents are encrypted in a shared ledger. Thus, there is absolutely no fear of losing the documents.

  • Backup

As the documents are shared across the entire network, backup of documents is always available.

  • Accuracy

Smart contracts offer accuracy as they do not involve manual filling of forms. The automated system is error free.

  • Speed

Manual paperwork is time-consuming. Smart contracts utilize software codes to initiate automated tasks. This saves a lot of time.

  • Saves money

The use of smart contracts forbids the interruption of any third party. In the absence of any intermediary, a lot of money is saved in the process.

All these benefits make the use of smart contracts in the blockchain, a technology to vouch for.

Conclusion

Not just banks and businesses, but many other sectors too gain from the implementation of smart contracts in the blockchain. Smart contracts in blockchain are amazingly beneficial in the areas that demand unalterable and transparent records. The records always stay safe and tamper-free.

Using smart contracts not just help the firms to consolidate the business operations, but also boost efficiency in many ways.[/vc_column_text][stm_post_bottom][stm_post_about_author][stm_post_comments][/vc_column][vc_column width=”1/3″][stm_sidebar sidebar=”2252″][/vc_column][/vc_row]

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