Smart Contract Examples: The potential of smart contracts in the real world

Smart Contract Examples: The potential of smart contracts in the real world

Education
September 9, 2021 by Editor's Desk
371
Cryptocurrencies around the world have become more popular than ever before. Their adoption in everyday life and in business can be attributed to a very significant use case: smart contracts.  A smart contract is the blockchain version of an automated process. They are a use case of the blockchain technology developed to make large transactions
Smart Contract Simplified

Cryptocurrencies around the world have become more popular than ever before. Their adoption in everyday life and in business can be attributed to a very significant use case: smart contracts. 

A smart contract is the blockchain version of an automated process. They are a use case of the blockchain technology developed to make large transactions easier and faster. A smart contract in blockchain also makes transactions more secure by removing the role of intermediaries.

For instance, an insurance company could use smart contracts to release claimed money to you automatically, without having to pay commissions to an agent. By automating the process and working on a blockchain ledger, the company and you, the user, are both assured of the outcome of the transaction at every point.

Smart contracts are nothing more than pieces of code, carefully designed by programmers. The usage of a smart contract in a blockchain is beneficial because it is reliable, transparent, and irreversible. Smart contracts are executed automatically by the blockchain when all predefined conditions are met. 

There’s a lot more to smart contract applications that are apparent at first sight. For example, they can be used to regulate the health insurance sector to reduce fraudulent claims. Smart contracts could ensure that funds were released for health-related expenditures only when hospitals verified them on the blockchain to reduce the risk of insurance theft.

Another real-world example of a potential smart contract is transparent voting. Free and fair elections are the cornerstone of every democracy. Smart contracts can ensure that votes are counted accurately, they are not tampered with, and no technical manipulations can be made in the favour of any one party. Smart contracts could also make maintaining voter lists easier and their verification during elections faster.

Smart contracts are the newest innovation that tries to make transactions easier. But that’s not all. The secret to its potential success lies in its scalability and versatility as a technology. Just like other applications for the blockchain started becoming popular when cryptocurrencies emerged, smart contracts can be used in hundreds of ways going forward. 

For example, the use of blockchain as a basis for NFTs and their sale became popular only when the blockchain was verified as a reliable technology by the emergence of cryptocurrencies. Similarly, with the adoption of certain types of smart contracts, probably in the real estate and financial sector, other uses can emerge gradually.

Currently, they’re being used to remove the dependence on lawyers to facilitate legal contracts. Smart contracts are also being used to automate behaviors and decisions, making risk assessments and auditing easier than before.

The usage of smart contracts also looks promising when considering their use in IoT appliances like smart locks and wallets. In the supply chain scenario, they can be used to physically approve merchant transactions depending on various factors like the integrity of goods and the timely payment of invoices.

The potential uses of smart contracts in blockchain are endless and all that’s left to see is how soon they can be converted into an integral part of daily life. The world is gradually adopting crypto in everyday life. With the use of smart contracts, it is only a matter of time before every major transaction gets facilitated by the blockchain.