In order to facilitate trusted transactions in a Blockchain network, we use smart contracts to make the exchange from an asset or currency into code possible. A smart contract is a computer protocol intended to digitally facilitate, verify or enforce the negotiation or performance of a creditable transaction with the terms of an agreement between buyer and seller, directly written into lines of code. Smart contracts allow for transactions and agreements to be carried out among various parties without the need for a central authority. They render transactions that are traceable, transparent and irreversible. 

What are the advantages of smart contacts?

Smart contracts possess multiple advantages over traditional arrangements. Some of them include:

  • Accuracy
  • Transparency
  • Clear communication
  • High levels of speed
  • Top-notch security
  • Efficiency

Importance of smart contracts

After understanding what a smart contract is, it’s natural to want to know its applications. As you can imagine, many industries can benefit from this kind of technology, and listed below here are just a few examples:

Financial services

Smart contracts curb the rampant fraud cases in the insurance industry because both the insurer and insured can lock into an agreement without the use of notaries, lawyers, and other intermediaries. This will help save a lot of time and in the process, money.

Mortgage transactions

Smart contracts can allow buyers and sellers to be automatically connected in a frictionless, hassle-free process. Since a smart contract will govern all the terms and conditions normally supervised by professionals, this saves both parties a lot of time.

Supply chain transparency

Smart contracts simplify the tracking of packages as they move around the world. This technology will make the supply process more transparent by clearly showing where exactly the package is at every instance. This will help organizations save costs and keep their buyers safe from missing shipment and other issues. 

Medical research

Smart contracts can facilitate the effective sharing of data amongst various research institutions through the research process. Data on clinical trial and research for potential cures to diseases can be freely exchanged without compromising the privacy of the patients involved.

Digital identity and records management

Since individuals own and control their own digital identity, other individuals as well as tech companies won’t be able to get away with mining our data and personal information. Security risks will be evaded because individuals can choose which organizations gain access to their data.

Conclusion

Based on their many applications and advantages, there is reason to believe that smart contracts will be the order of the day very soon. The self-executing nature of these contracts makes them quite convenient.