How smart contracts work
A Smart contract, there can be as many stipulations as necessary to satisfy the participants that the task will be completed successfully.
A developer can then program the smart contract, although increasingly, organizations using blockchain for business are providing templates, web interfaces, and other online tools to simplify smart contract structuring.
Benefits of smart contracts
Speed, efficiency and precision
Because smart contracts are digital and automated, there is no paperwork to process and no time to reconcile errors that often result from manually filling out documents.
Pros and Cons of Smart Contracts
- Smart contracts have revolutionized the way we can face and solve many situations and problems that we face today.
- But like everything in this life, it has its good things and its bad things.
- Below we will see the main advantages and disadvantages of smart contracts .
Advantages of smart contracts
- Smart contracts express their terms and conditions in an alphanumeric language that is established on a chain of blocks that is unchangeable.
Some of the advantages of smarts contracts are the following:
Provide greater confidence to the parties involved
- Documents are kept in a shared and secure ledger. Also, no one will be able to steal or lose any of the stored data, so because smart contracts are an unbiased system, you don't have to trust others.
Procedures are done autonomously
- By opting for smart contracts, the need to require intermediaries will be eliminated, because the agreements are more objective and are stored and processed, in such a way that they must be fully complied with without bias for any of the parties involved.
Offer higher levels of security to users
The Blockchainx technology that is generally used to develop smart contracts guarantees greater trust due to the immutability of the data.
These have the advantage that they are very difficult to hack or be affected by some type of practice by computer criminals , since they are protected with complex cryptography with which the stored documents will be kept safe.
Greater transparency and the possibility of cooperation between the users or organizations involved in the agreements will also be offered.
They will save on paperwork costs
The security provided by smart contracts will allow the use of real estate agent services, assistance, advisors, among other intermediaries, to be avoided, which will allow considerable savings in the expenses that these types of procedures and tasks usually require.
Process automation
By using smart contracts, the processes will be more efficient because it will not require wasting time to process a lot of documents manually, nor will they have to be transported or sent to specific places.
This information will be available at all times, so it can be consulted when necessary. In addition, the cost of procedures will be reduced.
Disadvantages of smart contracts
With smart contracts, what has been agreed becomes a reality, since everything that is indicated in said chain of blocks cannot be modified under any pretext, which can become an inconvenience in some circumstances.
Some of the main disadvantages of smart contracts are as follows:
They can be vulnerable if there are bugs in the code
Since smart contracts are of recent date, although they may look very promising, they can be found prone to problems, among these code, since it cannot have errors that generate the theft of money that has been stored in an account. intelligent.
Stored information cannot be reversed
Contrary to what happens with traditional contracts that can be terminated in court, in the case of smart contracts, they work no matter what happens due to the nature of the blockchain , since its policy is based on the premise of that “The code is Law”
These contracts have as a disadvantage the fact that no matter what happens, they do not allow the object of the agreement to be modified, because they are based on blockchain technology.
In this sense, there is no possibility of finding a solution in exceptional circumstances that may harm any of the parties that make up these contracts, which raises the question of how governments can regulate this type of contract and tax it.
Information can be hacked
Some technologies that are used to make smart contracts, such as IoT devices , serve to have a link with real assets, but are easy to hack.
