When it comes to the most trending topic of the digital business sphere “Cryptocurrencies” and crypto exchanges, we often tend to discuss blockchain technology and its contribution to the crypto space. And while we discuss blockchain technology, the mention of smart contracts should not be forgotten. Smart contracts are a great tool for businesses, as they help customers with efficient, seamless, cost-effective transactions in a short span of time, without any breaches or disputes between them. And smart contracts also offer various other benefits to a wide range of industries to enhance their businesses.
If you want to achieve such benefits and make your business credible and profitable, this blog is for you. Here, we are going to discuss all that you need to know about smart contract development for your business. Let’s begin with a quick glance at what smart contracts are.
What are smart contracts?
Smart contracts are like any contract or agreement in the physical world, but they are completely digital and operate through a computer software program that is stored within the blockchain. The smart contract, in simple terms, is a tool or a software program that facilitates the terms of an agreement between users, verifies, and automatically executes the transactions. Smart contracts remove the involvement of any third party and allow direct transactions between users. Smart contract applications are referred to as the “Killer Applications” of cryptocurrencies because they have high potential to replace any traditional contracts
How does a smart contract work?
For you to understand how smart contracts work, let’s take a look at a simple example,
- Let’s imagine that you want to sell a property of your own
Now, selling a property involves a lot of paperwork and third party involvement and communication, including the risk of fraud.
- Traditional real estate mostly involves third parties such as real estate agents, who act as an intermediary throughout the process between the buyer and seller. The agencies they are involved with will offer escrow services through which funds can be transferred between the parties involved. And, once the deal is done, the buyer has to pay both the escrow service and the agent on a commission basis. This will lead to costing an ample amount of money and comes with risk factors at the seller’s end.
- This is where smart contracts come into play.
- Smart contracts remove the burden of all the paperwork. Smart contracts are a program or a code which contains specific terms and conditions. And, when the monetary and other specified conditions are agreed by both the parties, it automatically executes the transactions.
- With smart contracts, the users can store their money value and property information over a distributed ledger, which can be viewed in real-time. Since users get to view in real-time, the chances of risk are reduced. Also, smart contracts do not involve any third party, and everything is automatically executed, helping users with an efficient business process.
- Applying smart contracts in our day to day lives can change the pace of our businesses, as they involve several advantages over traditional contracts. Let’s take a look at some of the crucial ones.
Smart contracts are all that we need today! Why? Key advantages:
Smart contracts are digital, programmable documents/ contracts. So, it deprives the users of all the paperwork and helps companies to promote their businesses globally at ease, with less cost.
With smart contracts, business agreements are automatically initiated and executed, eliminating the need for a third party. Therefore, they are risk-free, and the agreements are unbreakable and immutable.
- No single point of failure
Smart contracts work based on a decentralized network, and businesses are not dependent on a third party or a single point of authorization. Therefore, even if an individual leaves or there is an error at one point, the network will continue to function without any data loss or glitches.
Smart contracts are accurate to the minutest level. The details of every transaction are stored on the network, and the involved parties can access them at any given time. The transactions are also stored on the blockchain as a form of future records, which is helpful to avoid any disputes between the users in the future.
- Security and efficiency
Smart contracts come along with the highest safety standards and the latest data encrypted safety. Hence, they are 100% secure and provide high efficiency to the users by executing multiple transactions at one time, quickly and seamlessly.
The use cases of smart contracts across various industries
- Banking and finance
Smart contracts should be an obvious choice for banks and financial institutions. This is because smart contracts could be of big help for commercial transactions in terms of simplifying the process and improving the speed and accuracy of information.
- Real estate
Real estate is a business that doesn’t happen easily. It involves a lot of paperwork, third parties, and risk factors. Smart contracts eliminate all these burdens and help buyers and sellers conduct transactions efficiently and quickly. Smart contracts provide transparency to the users, with proper terms and conditions, which helps them carry out their business properly without any surprises or dodgy deals.
Smart contracts help healthcare providers by offering the ability to transmit and analyze patient data efficiently. Also, it makes sure to maintain patient confidentiality with integrated, advanced security encryptions.
With smart contract development, insurance companies can simplify and streamline their policies better between the company and the customers. In case of unfortunate events such as natural disasters, etc., customers can efficiently claim their money and use it in a timely manner with the help of smart contract execution.
- Internet of things
Smart contracts, combined with blockchain, helps users track the product and its location accurately, for example, online shopping. Smart contracts are fully automated, and therefore, ensures the right product gets delivered to the right person without any confusion. The sensor involved in the blockchain nodes, along with the smart contracts, helps the exact location and status of the product until it gets delivered to the customer.
Which cryptocurrencies offer smart contracts?
As discussed earlier, Smart Contracts can be integrated into any blockchain network with any business. When it comes to cryptocurrencies, the types of cryptos in the current market are wide-spread, and many of them offer smart contracts. Here are the few significant ones with the most use cases.
- Ethereum (ETH)
- Bitcoin (BTC)
- Ripple (XRP)
- Solana (SOL)
- Polkadot (DOT)
- Ergo (ERG)
- Cardano (ADA)
- Alogorand (ALGO)
- Nxt (NXT)
- Decred (DCR)
Out of these, Ethereum is the most often associated cryptocurrency with smart contracts. This is because they are more robust, versatile, and secure. The smart contracts are coded with the language known as solidity.
With all that being said, if you want to execute robust smart contract development for your business, here are the essential components you need to look into!
Key elements for Smart contracts
- Digital Smart Contracts Architecture with a properly planned, bug-free workflow.
- User-friendly design with customized features that is adaptable for any industry.
- Legitimate Smart Contracts Auditing that will help with reliability, and free from bugs and breaches.
- Optimization of Smart Contracts to help customers save Ethereum gas
- Guide users on how to build Dapps( decentralized applications) along with smart contracts integration, which will help with an efficient, seamless business with high performance.
What is the future of smart contracts?
The use cases for smart contracts have been widely evolving across the globe over several industries in recent past years. Various dynamic international and domestic organizations, as well as newcomers in the market, adapt smart contracts for their businesses.
Research says that the global smart contracts market is expected to hit 300 USD Million value by the end of 2023, with an annual growth rate of up to 32%. The demand and expansion of the market are ever-growing. Also, the revolution in new innovations, advancements in technology are rapidly getting better with each day. If you are looking to make your business more efficient, accurate, secure, and seamless, smart contracts are the fitting solution.
If you desire to acquire smart contract development services for your business, get in touch with our experts from Blockchain App Factory. We will make sure to offer you robust services in a short turnaround time, and at cost-effective prices. With the massive knowledge and experience of our developers, your business is assured to gain a competitive advantage and turn around huge profit returns! So, why wait? Reach out and let’s discuss some fruitful business opportunities.