What is a Smart Contract?
Smart Contract is a term that describes a special set of protocols capable of automatically executing terms, agreements between parties in a contract (in this case, machine systems). thanks to the support of Blockchain technology. All Smart Contract activities are performed automatically and without interference from outside, or through an intermediary third party. Transactions performed by transparent contracts are transparent, easily accessible and can not be intercepted or reversed. Terms in Smart Contract are equivalent to a legal contract and are recorded under the programming language.
The most prominent feature of the Smart Contract is that it allows the two parties to execute the contract accurately, safely and quickly. There is no need to meet face to face with each other, or a third party with just an Internet connection. The concept of Smart Contract was first introduced by Nick Szabo in 1993.
At the time he had stated the main operational principles, but at the time, there was not enough technology and environment to make it happen. But things have changed with the birth and development of Blockchain technology.
Bitcoin has laid the foundations for building smart deals on Blockchain or “Smart Contract Blockchain”. However, it still can not satisfy the requirements for smart contracts. Only when Ethereum and Smart Contract Ethereum appeared, the idea of a new smart contract was made available to all users, providing a new way to set up a contract.
What are the benefits of Smart contract?
Smart Contract is an application that takes advantage of all the advantages of Blockchain technology so it has many benefits, below is its main benefits.
Automation: The process of contract execution is automated by. At the same time you are the creator of the contract, no longer dependent on brokers, lawyers or anyone else. As such, it also eliminates the risk from third parties
Not Lost: Your document is encrypted on a general ledger, meaning it can not be lost. With Blockchain, all your friends are backing up your documents.
Safe: Blockchain will ensure the safety of your documents. No hacker can threaten them.
Speed: Smart contracts use programming languages, software code to automate terms, and save hours on unnecessary tasks.
Savings: Intelligent contracts save you a lot of money by eliminating intermediaries.
Accurate: Automated contracts are not only quicker and cheaper, but they also avoid common errors when writing documents.
Pros and Cons of Smart Contract
1. Advantages of Smart Contract:
Smart Contract applications can be used in many areas in the future, and now some areas have implemented smart contracts including: Electronic money, logistics, banking, real estate, even the election .
Freedom: Not managed by any agency
2. Disadvantages of Smart Contract:
Legality: You will not be protected in the event of a defect arising from the laws of countries that do not currently have policies to exploit and manage smart contracts.
Implementation costs: Need to pay for infrastructure, computers, and good programmers to deploy.
Internet Risks: The nature of the Smart Contract is very secure, but if you reveal some sensitive information or hackers exploit that information, there are likely to be problems.
Applications of Smart Contract:
Understanding how Smart contracts work and which platforms are used to facilitate transactions is a good foundation but understanding the following uses the technology application will help you understand. Smart contracts can really be used in the future.
Here are five industries that can benefit from the use of Smart Contract.
Some of the major issues affecting the real estate market are the need to interact directly with agents, homeowners, inspectors, and third-party service providers to verify each step of the lease / buy a house.
Smart Contract Automation contracts can simplify many processes by cutting down on unnecessary direct transactional demands. Applications can also be improved such as real estate search and rental / cash flow management for real estate companies.
Rentberry, a distributed application platform, is an enterprise that automates rent payments, manages safe deposits, and even rents homes using Smart Contract. With Rentberry, a rental agreement is signed and confirmed between the landlord and the tenant. This is in the form of a Smart Contract, which is put into blockchain and therefore can not be changed. In Smart Contract, rent payments are distributed automatically according to a predefined schedule. These terms can be negotiated before entering blockchain. The terms and conditions of the deposit are set at the beginning of the lease, and at the end of the lease, the liability will be deducted and the remaining amount will be automatically returned to the tenant. This is a good example of how Smart contracts can be used to create a fully accessible record of a lease, avoiding fraud by any party throughout the process. Leasing. Supply chain management Logistics supply chain is an industry involved in the storage and transportation of goods by land, sea and air. This is one of the most complex industries in the world, since each item must be tracked to ensure it reaches the right destination and there must be many different transactions to complete a single shipment. Although most organizations Supply chains already have some digital tracking tools and asset management but they are often very expensive and require people to take most of the steps, such as scanning packages, updating books And using the Smart Contract technology, logistics supply chain enterprises can streamline their operations through automation. Chain Business Insights, an independent research company focused on the application of blockchain in supply chain management, has recently released a research brief to identify some of the key benefits of Smart Technology. These benefits include: Visibility and verification of items being shippedActivities (automation) Clarity of Contract Terms (Simple Contract) Fraud ProtectionConnection The company also noted that the application of this technology in the logistics industry can be difficult. Laws should catch up and standards and protocols must be effective to maintain privacy and security when using Smart Contract. Shipchain and VeChain are two blockchain projects that are working to bring the job. Smart Contract for the supply chain industry. Shipchain aims to improve tracking of packages and maximize the efficiency of blockchain-based feeds, while VeChain hopes to enhance supply chain security by using Smart Contract and The other blockchain infrastructure to prevent theft and fraud. Financial servicesNadadaq pointed out the main problem hindering the widespread adoption of smart contracts is the availability of smart interfaces between The blockchain network, in which the Smart Contract runs, and the rest of the world. With this in mind, industry groups like FinTech Network and Zerado still believe that Smart Contracts can provide many beneficial applications. Banks if they can figure out how to effectively legally contract into Smart Contract. This may require banks to adopt Smart Contract technology along with the development of a blockchain infrastructure that is compatible with legacy financial services infrastructure (banking networks, insurance, etc.). The regulatory authorities may also access and read records of all transactions, allowing them to verify that all parties comply with any applicable regulations. If done correctly, this system will ensure a secure, private and scalable platform for all transactional transactions. However, in practice, not as simple; There are other barriers between smart contracts and most financial services companies. Firstly, regulators operating financial institutions in other countries will need to develop They can effectively protect the populations they serve. Such regulations are necessary to ensure that contracts are enforceable and secure. This technology must also ensure the safety of broad use in the industry, as transaction records may is visible to all users. This leads to a discussion of questions such as “what data should be shared with all participants?” Or “how do users verify the validity of the data included in the blockchain? through the services of Oracle? “Once the answers to all these questions can be answered clearly and the issues related to administration have been resolved, we will certainly see. The increase in the use of Smart Contract in the financial services industry. Government agencies Smart Contract is being considered as a solution to problems in government such as contract management, identity verification, and One example is the idea of using blockchains to record the promises that candidates compete for. c does and uses that data to ensure that the candidates adhere to their claims. SmartContract can be represented by a lawmaker who agrees to allocate a certain amount of money to a certain issue and once the value is sent the contract is made, resulting in community members being informed that it happened. If that amount is not deposited on a predetermined date, the contract will perform differently, informing the component when the promise is not retained. Another example, the U.S. government is currently seeking to prevent Blocking Smart Contracts can be used to improve the system used to bid on public contracts. Others believe that Smart Contract can be used to facilitate a ballot for polling, which can be easily accessed by citizens. Of course, such a system would need to be completely secure and it will need to be able to verify a person’s identity without affecting their personal personal information on a public blockchain. Healthcare SystemHealth is a great industry. Health care transactions are a major part of the economy in many countries, especially in the United States, where it accounts for about one-fifth of domestic spending. With so many transactions happening globally, Health care explicitly transfers huge amounts of data to one another. This data can range from public to extremely confidential, thus securely storing data that is of primary concern to health organizations. However, accuracy is thought to be as important as privacy, because incorrect patient charts can lead to inaccurate treatment that can aggravate the condition of the patient. Lockchain can be used. Use to store a variety of health data in a precise, fully encrypted, digital way. Patients can then choose who is allowed to access their health information by distributing their access key directly to trusted medical professionals. This minimizes the risk of fraud and single Simple for patients, insurers and health care organizations to trade with each other. Patientory, a blockchain project, has raised more than $ 7 million over the first three days of the ICO, aiming to improve the storage and management of patient data. This will allow health organizations to create Smart contracts immediately deliver accurate health data to insurance companies or other healthcare organizations, giving them the ability to process payments between organizations faster. Payments will be ideal if sent automatically by Smart Contract. Conclusion Technology is changing almost every aspect of our lives. Therefore, it is not surprising that it has had a profound effect on how contracts are made (and veryfied); for example, we negotiate via email, VC and Skype and electronically sign without meeting Technology is also revolutionizing the broader issues of electronic signing, including identifying the parties, and forcing us to rethink the basic ideals of the meaning of conclusions and comply with the contract.