Smart Contracts 12 Use Cases

Ano­t­her best use case for smart con­tracts is tra­ding acti­vi­ties. When bene­fi­cia­ry inter­me­di­a­ries are remo­ved, smart con­tracts auto­ma­te work. This mini­mi­zes the asso­cia­ted addi­tio­nal ope­ra­ting cos­ts. Several com­pa­nies use smart con­tracts to per­form such tasks. Smart con­tracts can impro­ve the func­tio­n­a­li­ty of cli­ni­cal tri­als by opti­mi­zing cross-orga­niz­a­tio­nal visi­bi­li­ty. The pri­va­cy and auto­ma­ti­on fea­ture auto­ma­tes the exchan­ge of data bet­ween orga­niz­a­ti­ons. Accu­ra­te smart con­tracts help authen­ti­ca­te, iden­ti­fy, and aut­ho­ri­ze infor­ma­ti­on. Authen­ti­ca­ti­on, aut­ho­riz­a­ti­on, and iden­ti­ty remain open ques­ti­ons for smart con­tracts run­ning on block­chain-enab­led net­works. The widespread use of cus­tom smart con­tracts for count­less types of tran­sac­tions, which can redu­ce cos­ts and incre­a­se tran­sac­tion speed, may be clo­ser than you think.

Some U.S. sta­tes have begun to allow the use of smart con­tracts and block­chains in the legal sec­tor in cer­tain con­texts. Ari­zo­na, for examp­le, allows the crea­ti­on of enfor­ce­ab­le legal agree­ments through smart con­tracts, and in Cali­for­nia, mar­ria­ge licen­ses can be issued via block­chain tech­no­lo­gy. Smart con­tracts can run on dif­fe­rent archi­tec­tures such as dis­tri­bu­t­ed led­ger tech­no­lo­gy and block­chain. In the lat­ter case, the pro­gram is stored on a block­chain and exe­cu­t­ed when cer­tain con­di­ti­ons trig­ger the next action. For examp­le, a ser­vice could trig­ger a pay­ment or ser­vice. Smart con­tracts are one of the most popu­lar use cases for block­chain, and for many, the term smart con­tract means smart con­tracts on the block­chain. Many experts pos­tu­la­te that AI and block­chain can bene­fit from each other‘s defi­ning pro­per­ties. Smart con­tracts can bene­fit from the advan­ced com­pu­ting capa­bi­li­ties and adap­ti­ve sys­tems of AI tech­no­lo­gy, while AI imple­men­ta­ti­ons could leverage smart con­tract tech­no­lo­gy for auto­no­mous exe­cu­ti­on of rule sets and pro­vi­de a secu­re envi­ron­ment for sen­si­ti­ve and valu­able machi­ne lear­ning data. Zil­li­qa is one of many block­chain plat­forms deve­lo­ping advan­ced com­pu­ting capa­bi­li­ties with its pro­prie­ta­ry smart con­tract pro­gramming lan­guage, Scil­la, and an advan­ced par­al­lel pro­ces­sing frame­work enab­led by shar­ding. This list of real-world app­li­ca­ti­ons of smart con­tracts is by no means exhaus­ti­ve, and smart con­tract tech­no­lo­gy will impro­ve count­less other indus­tries in the future.

Many rese­ar­chers and deve­lo­pers are eager to leverage smart con­tract tech­no­lo­gy to meet the deman­ds of the gro­wing Inter­net of Things (IoT). While block­chain tech­no­lo­gy is alrea­dy typi­cal­ly used to ensu­re the secu­ri­ty and trans­pa­ren­cy of IoT devices, the bene­fits of smart con­tracts can dri­ve this inte­gra­ti­on. Governments can explo­re other smart con­tract use cases based on their needs. Land tit­le regis­tra­ti­on requi­res par­ties to trans­fer owners­hip in an effi­ci­ent and trans­pa­rent man­ner. Smart con­tracts can help. In addi­ti­on, its use will redu­ce audit cos­ts and impro­ve trans­pa­ren­cy throughout the sys­tem. In addi­ti­on, smart con­tracts can help redu­ce ope­ra­tio­nal risk and digi­ti­ze work­flows. Tra­de finan­ce can also be revo­lu­tio­ni­zed with the help of smart con­tracts. The­re is no doubt that it can help with inter­na­tio­nal trans­fers of goods and com­mer­cial pay­ment trig­gers with the use of a let­ter of credit. The natu­re of a shared led­ger means that mul­ti­ple par­ties need access to data, which can expo­se an orga­niz­a­ti­on to bad actors and exter­nal vul­nera­bi­li­ties. Depen­ding on the aut­ho­riz­a­ti­on levels of the block­chain that stores the smart con­tract, a com­pa­ny must be vigi­lant when it comes to mana­ging thre­ats. Inves­ting in a block­chain deve­lo­per or deve­lo­p­ment team would help an orga­niz­a­ti­on avoid poten­ti­al problems.

Inter­nal deve­lo­pers should per­form audits to mini­mi­ze thre­ats, use trus­ted third par­ties to per­form pene­tra­ti­on tes­ting, and eva­lua­te secu­ri­ty. Smart con­tracts have sim­pli­fied and impro­ved the manage­ment of capi­ta­liz­a­ti­on tables. It ensu­res that no media­tor bet­ween the par­ties, inclu­ding detenti­on chains, is invol­ved. In addi­ti­on to using smart cases for secu­ri­ties, com­pa­nies can use them for auto­ma­tic tra­ding, divi­dends, stock splits, and lia­bi­li­ty manage­ment. Smart con­tracts can also digi­ti­ze work­flows and help redu­ce ope­ra­tio­nal risk. An escrow account is a legal arran­ge­ment in which a third par­ty holds many assets until the sta­ted con­trac­tu­al pro­mi­ses are kept. In order to release inven­to­ry, the payer must take action. It is pos­si­ble to auto­ma­te the ent­i­re pro­cess with the help of smart con­tracts. The pro­cess runs auto­ma­ti­cal­ly after the ser­vice pro­vi­der veri­fies and authen­ti­ca­tes the details.

The­re are several types of ora­cles. For examp­le, scan­ners and sen­sors act as hard­ware ora­cles. An RFID sen­sor on a food ship­ment sends data to a smart con­tract, which then relea­ses the pay­ment to the sup­plier. As ano­t­her examp­le, an ora­cle can cap­tu­re in an IoT device a varie­ty of use­ful data that an arti­fi­cial intel­li­gence sys­tem mana­ges. The AI sys­tem then uses the data to auto­ma­ti­cal­ly acti­va­te smart con­tract pro­ces­ses. The white paper explo­red how the smart con­tract code affects legal ana­ly­sis. Over time, Ethe­re­um was released in 2015 by Gavin Wood and Vita­lik Bute­rin. It laun­ched the second genera­ti­on of block­chain tech­no­lo­gy, which intro­du­ced new con­cepts and tech­ni­ques for dealing with dis­tri­bu­t­ed ledgers.

One of the­se tech­ni­ques invol­ved smart con­tracts that brought auto­ma­ti­on to the ent­i­re block­chain net­work. Smart con­tracts can stream­li­ne post-tra­de pro­ces­ses, remo­ve dupli­ca­te pro­ces­ses exe­cu­t­ed by each coun­ter­par­ty to veri­fy tran­sac­tions, and per­form appro­pria­te tra­ding events. They enab­le uni­form con­trac­tu­al terms and opti­mi­ze the post-tra­de sett­le­ment of OTC deri­va­ti­ves. They also allow real-time sco­ring of posi­ti­ons to moni­tor and redu­ce errors. Insu­rers and poli­cy­hol­ders inter­act in many ways. Some exis­ting bar­ri­ers to a strong rela­ti­ons­hip bet­ween insu­rers and poli­cy­hol­ders are the com­plex chat­ter of insuran­ce poli­ci­es and frau­du­lent claims filed by poli­cy­hol­ders. The use of smart con­tracts could impro­ve effi­ci­en­cy when filing claims, when a poli­cy­hol­der chan­ges insuran­ce com­pa­nies, or when working bet­ween insuran­ce com­pa­nies. In addi­ti­on, insu­rers could detect mali­cious actions via the smart con­tract code at an ear­ly sta­ge. Clear com­mu­ni­ca­ti­on is cru­cial for both insu­rers and pati­ents. Sto­ring a pati­ent record on the block­chain could poten­ti­al­ly redu­ce paper-based pro­ces­sing, impro­ve regu­la­to­ry com­pli­an­ce, and enab­le easy sharing of infor­ma­ti­on bet­ween pro­vi­ders. For examp­le, a pati­ent needs a cer­tain medi­cal procedure.

A pri­or aut­ho­riz­a­ti­on request trig­gers a smart con­tract by digi­tal­ly veri­fy­ing insuran­ce coverage and releasing pay­ment to the moni­to­ring faci­li­ty. Also Read: Ban­king Indus­try Com­ple­tes Smart Con­tract Block­chain Test Smart Con­tracts can be very use­ful for plat­forms like Upwork or other inde­pen­dent plat­forms whe­re the platform‘s trust amount is held. Many com­pa­nies use smart con­tracts for this pur­po­se. By impro­ving data inte­gri­ty, smart con­tracts pro­mo­te incre­a­sed mar­ket sta­bi­li­ty. They also redu­ce accoun­ting cos­ts by allowing cost sharing bet­ween orga­niz­a­ti­ons. In smart con­tracts, the­re is no need to trust other par­ties to exe­cu­te a tran­sac­tion. This makes the who­le sys­tem untrust­worthy. The inte­gra­ti­on of decen­tra­li­zed net­work archi­tec­tu­re ren­ders the ent­i­re sys­tem trust­less, becau­se the exe­cu­ti­on of a tran­sac­tion or tran­sac­tion does not requi­re trust as an intrinsic part. With the rapid growth of smart con­tracts, IT lea­ders need to under­stand the role the­se con­tracts could play wit­hin an enter­pri­se tech­no­lo­gy eco­sys­tem. Once smart con­tracts start run­ning, it is not pos­si­ble to inter­rupt or stop the pro­cess. One of the fac­tors pro­ving that smart con­tracts pay off is the level of secu­ri­ty they offer.

Smart con­tracts ope­ra­te in net­works with immu­ta­ble data. This means that the data gene­ra­ted can­not be modi­fied or modi­fied under any cir­cum­s­tan­ces. It enab­les secu­re work­flow exe­cu­ti­on while main­tai­ning infor­ma­ti­on secu­ri­ty. Encryp­ti­on tech­no­lo­gy imple­ments smart con­tracts as inten­ded. Smart con­tracts can stream­li­ne inter­na­tio­nal trans­fers of goods through a quick let­ter of credit and initia­ti­on of com­mer­cial pay­ments, while enab­ling grea­ter liqui­di­ty of finan­cial assets. They can also impro­ve the effi­ci­en­cy of finan­cing for buy­ers, sup­pliers and insti­tu­ti­ons. One of the most obvious use cases for smart con­tracts is digi­tal iden­ti­ty. Indi­vi­du­al iden­ti­ty is one of the grea­test assets of this indi­vi­du­al. It con­tains repu­ta­ti­on, data, and digi­tal assets. Digi­tal iden­ti­ty, when used cor­rect­ly, can open up new pos­si­bi­li­ties for the per­son. Digi­tal iden­ti­ty can also help pro­tect the iden­ti­ty of coun­ter­par­ties and allow them to share it with the com­pa­nies they intend to share. It was in 2009 that block­chain tech­no­lo­gy appeared to the world.

Spe­cu­la­ti­on wasn‘t strong with tech­no­lo­gy at the time. Howe­ver, Bit­coin sur­vi­ved and today, as we all know, made histo­ry. Cryp­to­cur­ren­cy, one of the aspects of block­chain tech­no­lo­gy, cau­sed a sen­sa­ti­on and con­tri­bu­t­ed to its fur­ther deve­lo­p­ment – smart con­tracts are one of them. All of the­se use cases also fall under the use cases of Ethe­re­um smart con­tracts and the use cases of Block­chain smart contracts.