Smart contracts: are they here to stay?
Smart contracts are based on blockchain technology; thus, we can say that they inherit all the properties of blockchain technology. There are many benefits of smart contracts. One key benefit of the smart contract is the absence of the middle man. The smart contract only needs to be written once and left on their own. They don’t need someone to maintain them regularly, or even to keep them safe. Once written, these contracts will execute on its own, and no matter what, the execution will not cease.
Benefits of smart contracts
Smart contracts all work on the distributed ledger technology. This means they get the features that the traditional agreements lacked. Keeping anything over the distributed network will provide multiple benefits like:
- Immutability- No one can change the terms once set. If any clause requires a change, the parties involved will come to a mutual agreement, and the next clause will add over the previous one, meaning the newly added term will have its own timestamp so anyone can view the change.
- Security- The contracts are encrypted using the latest cryptography tools. Once they are placed in the network, the contracts are distributed over the network, and any change occurring on one end needs verification on the other, and only the verified changes are kept on the system. Any unverified data will be removed immediately, thereby making them secure and reliable.
- Transparency- The contracts are openly placed in the distributed network and can be accessed by those who have the key. This transparency allows people to view the terms at any point of point.
Applications of Smart Contracts
The complicated process of regular paperwork involves intermediaries, the possibility of manual errors, and high costs. Smart contracts provide a more reliable, trustworthy, cost-effective, and secure alternative to traditional paperwork. Therefore, smart contracts find applications in many different industries. Some of the applications of smart contracts are:
Mortgage Loans
There are many complicated details in the mortgage agreements like the income, assets, and credit score of the mortgagee. It is vital to verify these details to move forward with the mortgage loan. Generally, the intermediaries or the third parties complete this process, which makes it long and irritating both for the loan applier and the lender.
Smart contracts can be advantageous in this situation due to multiple reasons. The most important being the elimination of the middlemen to avoid any lengthy process and confusion. Moreover, all the information can be stored in a single place that both parties can access anytime.
Employment Contracts
Another area where smart contracts can be beneficial is employment contracts. A smart contract can store the terms and conditions of employment, which improve fairness. These terms can be anything like salary amount, job description, responsibilities, etc. Smart contracts can record these terms. So, in case there is a conflict, it can resolve it, resulting in an improved relationship between an employee and his employer.
A smart contract can also be useful in making payment of salaries faster and quicker. Moreover, it can also introduce transparency in the case of temporary labor. Therefore, preventing any interference of the agencies with the contract. Smart contracts can help in detecting any changes with the deal.
Securing Copyrighted Content
In today’s digital world, the content could be anything from a document to an audio or video clip. It is not just confined to mere words. Generally, the content’s owner gets a royalty fee on the commercial release of content. Since there are various parties involved in the content creation process, all these parties are accountable for royalty. However, practically there is no precise method of clearing doubts over entitlement. In these cases, smart contracts can resolve these doubts by warranting the royalties to the solicited contributor.
Supply Chain
Supply chain management is the transfer of goods, products or materials from the starting stage to the final stage. It is essential for any business. It is not the job of one person; there is the involvement of many persons. Smart contracts can help in tracking the product’s location anytime you want.
Each product can be checked throughout the whole process until it reaches the customer. A smart contract can detect the location of the product if it gets lost or misplaced. It brings transparency to the whole process.
Smart contracts have numerous benefits, such as implementing transparency, decreasing overhead expenses, and saving time in many industries. They are more accurate, secure, useful, and reliable as compared to traditional paper contracts.
SAFEBOX, not only lets you view the contracts placed on the system but also provide you with tools to verify the changes that may occur throughout the transaction period.
Verifying the contract changes has never been this easy. Join us now!! And learn how it makes your job easy.
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