In this blockchain era, it’s impossible not to hear about smart contracts.
We are all aware of the capabilities of blockchain. However, a lesser number of us are acquainted with the fact that the foundational pillar of blockchain app development is smart contracts.
When Bitcoin was launched, it introduced the world to the new concept of decentralization. However, when Ethereum came, it brought new concepts of distributed ledger technologies and token standards.
One of those is a smart contract that changed the face of blockchain. With decentralization, we could also enjoy the benefits of advanced automation.
How did smart contracts help in the adoption of blockchain?
What are smart contract use cases?
Why are companies leveraging smart contract development services?
Are smart contracts applicable in real life?
Keep reading to find out.
Why Is There A Need For Smart Contracts?
You must have seen the physical contract.
A physical contract binds involved parties to follow a set of terms and conditions. It can be an agreement of payment, property transfer, business deal or any other matter.
However, how often have you heard of disputes in these contracts?
Well! Everyone has some story to tell.
On the contrary, smart contracts leave no room for disputes. Similar to physical contracts, smart contracts are agreements between parties.
But there’s a catch. Smart contracts are digital contracts on the blockchain.
To define smart contracts, they are self-executing, digitally coded contracts. These contracts are based on digital protocols that execute themselves once the terms and conditions are met.
But there are a few questions that most of us have.
Firstly, how does a smart contract ensure fairness?
No one can change the terms or output of the contract once it’s deployed.
Secondly, how does a smart contract ensure automation?
Smart contracts are self-executing protocols. You do not need a third party to oversee the contract. Instead involved parties agree on the terms which are then digitally coded into the contract.
Finally, once the contract is deployed, it will automatically act as per the terms and give the output as defined.
Lastly, how smart contracts are decentralized?
Smart contracts are built over a blockchain network. Being powered by blockchain, all the data are stored securely on the network.
So, you need not worry about data security.
Moreover, being on the distributed ledger, everyone has a copy of the contract.
By this time, we believe you have got a fair idea of the basics of smart contracts.
Now let’s come to why companies are after smart contract development.
Businesses are getting smart contract solutions to boost the productivity of their business processes.
With smart contract solutions, businesses can:
- Automate processes
- Reduce human involvement
- Direct employees to high value work
- Lower errors
- Achieve high efficiency
- Get more productivity
- Reduce disputes
- Boost profitability
- Enhance customer experience
If your business is struggling to optimize its processes, get smart contract development services. One of the best ways is to book a consultation call with experts in this domain.
Now let’s move to smart contract use cases across various industries. This will give you an idea of how you can apply smart contracts in your business.
8 Smart Contract Use Cases
Digital Identity
The online world is very hideous.
If you go to any website or use any app, they will ask permission to access your data. Even if you deny access to all data, you will have to share some data to use their services.
This puts your identity on the black market.
So, what’s the solution?
The solution is smart contracts.
You can store your personal details and other data in smart contracts. This will form your digital identity.
How will this help?
When you access the websites or apps, you can link your digital identity to the platform.
Now your servers can access the necessary data without actually knowing who you are.
It is frictionless KYC, where the counterparties can verify your identity without knowing your true identity.
For example, MyEarth ID is a digital identity management system that allows users to maintain their digital identity. Moreover, it also allows third parties to access and verify identities while maintaining identity security.
Supply Chain Management
Supply chain management is one of the messiest things to handle for businesses.
By implementing smart contract solutions in the supply chain system, you can bring transparency and improve overall efficiency.
How can smart contracts transform the supply chain?
Smart contracts in supply chain systems can:
- Eliminate the unnecessary middlemen
- Accelerate the process
- Reduce operational costs
- Automate processes
- Record crucial goods data
- Audit, verify and process transactions
To sum up, smart contracts in the supply chain will improve the traceability and tradability of the goods.
Thus, businesses can have a streamlined supply chain infrastructure. This will, in turn, boost their productivity.
Loans & Mortages
Smart contracts in loans and mortgages can do wonders.
It can automate the entire lending and borrowing process and eliminate disputes completely.
The lender and the borrower will be bound by a digitally enforced smart contract.
Alongside automating the process, the smart contract will also hold the collateral in an escrow account and release it on loan repayment.
Smart contract development in lending and borrowing will simplify the loan process and bring transparency.
Financial Data Recording
Smart contracts can efficiently record and process financial data.
It can automate the whole process, reducing costs and increasing accuracy.
Smart contracts can run financial protocols faster for financial auditing and compliance management.
This will help businesses accelerate their workflows and streamline their financial management systems.
Insurance
Smart contracts in insurance can be of great help.
The insurance sector is often caught up in claim disputes and delayed processes.
Smart contracts can help automate claim processing. Moreover, it can store user data, verify the claim, and prevent fraud.
In addition, it will also enhance the process by ensuring policy compliance. Smart contracts can check if the user has submitted the necessary documents and verify the details for authentication.
To sum up, smart contracts can increase the overall efficiency of insurance services.
Elections
The implementation of smart contracts can revolutionize the voting process, ensuring a secure environment and minimizing the risk of voter manipulation.
By utilizing smart contracts, each vote becomes safeguarded and recorded on an immutable ledger.
The robust encryption employed in smart contracts makes it extremely challenging to decode or tamper with the votes.
Furthermore, smart contracts have the potential to boost voter turnout by eliminating the need for individuals to physically visit polling stations.
An online system powered by smart contracts allows voters to conveniently cast their votes from anywhere.
Retail
Smart contracts offer valuable solutions for streamlining administrative tasks that often burden traditional brick-and-mortar retailers.
Retailers can leverage smart contracts to facilitate prompt payments to contractors, simplifying financial transactions.
Additionally, these contracts can digitize payroll administration, enabling real-time tracking and management.
Retailers can also employ unique blockchain identifiers on inventory units, granting them visibility across the entire supply chain.
This increased transparency enhances operational efficiency and fosters trust among stakeholders.
Clinical Trials
The integration of smart contracts can bring significant improvements to clinical trials, particularly in terms of cross-institutional visibility and data sharing.
These contracts automate the sharing of data between institutions, promoting seamless collaboration and preserving privacy.
This application of smart contracts stands as a tangible, real-world example of their effectiveness.
Furthermore, smart contracts can automate trial processes and facilitate the secure exchange of information within the industry.
They can assist in tasks such as identity verification, authorization, and authentication of data, enhancing the overall efficiency and reliability of clinical trials.
Conclusion
Smart contracts accelerate blockchain adoption across several industries. It enables us to bring the combined benefits of smart contracts and blockchain to businesses for decentralization, higher efficiency, and automation.
It presents unique ways of solving problems in the financial sector, insurance, government processes, loans, supply chains, and more.
If you are looking to streamline your business processes, get our Ethereum smart contract development services.
Book a call with our experts to explore how we can transform your business model with smart contract solutions.
I am the CEO and founder of Blocktech Brew, a team of blockchain and Web 3.0 experts who are helping businesses adopt, implement and integrate blockchain solutions to achieve business excellence. Having successfully delivered 1000+ projects to clients across 150+ countries, our team is dedicated to designing and developing smart solutions to scale your business growth. We are focused on harnessing the power of Web 3.0 technologies to offer world-class blockchain, NFT, Metaverse, Defi, and Crypto development services to businesses to help them achieve their goals.
