The appearance of smart contracts on a blockchain
Why the blockchain is ideal for smart contract ?
Over the next five years, this growth is expected to be remarkable, with many industries using the many benefits of a smart contract Development (such as accuracy and transparency) to run a more efficient operation.
How can smart contracts be powered through the blockchain? It is important to first understand the details of a blockchain. Think of a digital ledger — that is the essence of a blockchain. This ledger is available to a network of users, also known as nodes. When a record is written to the ledger, it is assigned a unique identifier and linked chronologically to the previous record. Data written to the ledger uses one-way encryption for maximum security, and is visible to all nodes on the network. This also allows a periodic audit from the nodes to identify irregularities. With so many nodes working together transparently, it is impossible for hacks or irregularities to occur.
The value of smart contracts
A contract is still a contract, whether smart or traditional: it is a documented agreement between the parties. In the traditional model, contracts use paper signatures. This approval process means physically taking the document from one party to the other, sometimes using scans and PDFs to speed up the process. In the older sense, this could mean physically sending the package between the parties.
Smart contracts incorporate modern technological capabilities:
Increased Accuracy — With a permanent record in chronological order, the signing process is sequenced for maximum efficiency. Instant transmission after signatures significantly streamlines workflow.
Increased Transparency — Since the blockchain is visible to all parties, all contract signatures and status are recorded in a completely transparent manner that also makes the ledger a single source of data.
Absolute Permanence: Smart contracts on a blockchain create a permanent, immutable record that can also be relied upon to provide information on the dates and status of the signature, even years later.
Blockchain for smart contracts: use cases
Smart contracts make sense for many sectors, but can be especially useful for insurance companies, the banking sector and the government.
However, unlike insurance, mortgage contracts involve a lot of legwork for the homeowner or buyer, and not for insurance agents or other professionals who spend their days dealing with this type of things. Smart contracts make this much easier to understand, with an always-accessible digital process that offers an easy to-do list of required documentation and contract signing status. This can also create the tracking of optional items, such as exemption from inspections or obtaining proof of insurance in specialized circumstances.
Blockchain Smart Contracts for Governments — Bureaucracy in government work is nothing new, but being able to streamline paperwork saves a lot of time and effort, as well as taxpayer money. Blockchain-based smart contracts increase efficiency by activating the approval chain directly in the actual contract. This means that approvals, signatures, contingencies and additional documentation are transferred digitally in a secure and transparent way. Although the volume of required government signatures may not change, the path to get there has been shortened by blockchain smart contracts.
Blockchain Smart Contracts for Insurance: When car accidents happen, all parties involved have to deal with insurance and sometimes the local police and the Department of Motor Vehicles (DMV). A smart contract creates a single source of data, while maintaining transparency to everyone involved: the insurance agents, the drivers, the police, the insurance regulator, the legal teams, the repair shop, etc. All of this allows for the digital upload of key documentation and photos to prove both the process and the claims. What’s the score? While the circumstances may be unpleasant,
Blockchain smart contracts for your business
Is it possible for the paperwork to be completely digital? With smart contracts on a blockchain, this is very feasible, even in highly bureaucratic situations like government contracts. Oracle Blockchain Development Platform Cloud Service is such a tool that can help organizations create and automate smart contracts. Learn more about this smart contract platform or the rest of Oracle’s blockchain capabilities .
