The benefits blockchain brings to businesses has become the talking point of one and all within and outside the blockchain universe. As industries and businesses continue blockchain adoption with the ever-increasing rate they realize the benefits that Smart Contracts bring to a blockchain solution for businesses. In this blog, we put all questions to rest by discussing in details the compatibility and flexibility that smart contracts bring to businesses transactions as well as the blockchain framework at large.





Centralization: A Curse?

Offline and Online transactions are moderated and affirmed by a third party service provider or payment gateways like PayPal. Third parties can be banking institutions, law enforcement agencies, state bodies or any other certifying authority.

Some notable drawbacks of these centralized payment solutions include: Overdependence on intermediaries fosters monopoly on transaction charges which affects all transactions (commercial, banking and business alike). Personal and Financial Data of users is highly vulnerable in centralized repositories.





Smart Contract: The Decentralisation Remedy

The term smart contract was coined in 1995 by a computer scientist named Nick Szabo. Szabo, in one of his articles from the time, clearly explained the purpose, need and implementation of a smart contract within a distributed ledger.

A smart contract in simple terms is a digital agreement within the blockchain environment. The agreement is based on a set of agreed pre-conditions between the two parties or the network consensus. A smart contract is evoked automatically once the conditions of the agreement are met.

Smart Contracts eliminate any dependence whatsoever on the third party and enable the exchange of shares, money, property, or anything of value between two individuals, parties or businesses in a transparent and conflict-free way.

In the blockchain framework, smart contracts are a digital avatar of physical contracts. They can be pre-programmed as per the agreement conditions. In addition to this, they can also be programmed to trigger penalties if one or both of the parties disregard the pre-set transaction terms and conditions.





Smart Contract Advantages

Flexible: Can be programmed to strictly adhere to transaction agreement terms and condition. Decentralized: Smart Contracts are the nerve center of the blockchain network. This means that all data and operations triggered by them are part of a distributed append only ledger.

Immutable: Smart contracts cannot be altered or changed. The terms of an agreement once programmed into a smart contract cannot be altered too.





Blockchain Networks Using Smart Contracts

Bitcoin and Ethereum are two popular blockchain networks with well-defined protocols for using smart contracts. Bitcoin has a custom programming language for building custom smart contracts like payment channels, escrows, time locks, and multi-signature accounts.

Ethereum Blockchain leads the race when it comes to the smart contract. The Blockchain has been tailor-made for building compatible multipurpose and multi-use smart contracts. All Ethereum smart contracts are programmed in Solidity language. Ethereum, however, needs to attend scalability and traffic issues.

EOS is another blockchain that supports the implementation of robust and safe smart contracts with greater transaction speeds and liquidity. The Medipedia Blockchain solution for Medical tourism is based on EOS Blockchain.





Smart Contract Benefits

Smart Contracts powered by smart algorithms encompass all the key features of a blockchain including decentralization, transparency, and safety. These features coupled with immutability make smart contracts ideal for making business deals as well as executing transparent yet anonymous transactions. Some key benefits of Smart Contracts include:

Peer to Peer contact and dealing with customers. Self-executing nature of smart contracts fosters increased trust in business agreements and transactions. 3. Smart Contracts make business transactions cost effective by eliminating additional fees of middlemen and agents. Not Prone to failure or shutdown due to third-party actions. Network and data integrity remains intact even if a participant leaves or breaks the contract. All contract transaction is registered on a public append only distributed ledger. This means that record keeping is done in chronological order with no provisions for tracing back and editing old transactions. Transactions are verified based on a consensus protocol. Outcomes of smart contract execution are verified by all participants in the network. Hence, any attempt to force transaction or alter funds is immediately red flagged by participants. This helps in real-time fraud detection and security.





Real World Use Cases of Smart Contracts

Smart Contract enjoys popularity and usage across a wide plethora of Industry services and operations underpinned by a blockchain framework. A few though deserve special mention. These include:



Healthcare

Smart contracts can impact tremendously by streamlining consultancy as well as diagnosis process. They can render credibility and cost-effectiveness to the healthcare services both at private and state level. Medipedia platform is an apt example in this regard. It brings medical service providers and patients on a common peer to peer platform for faster yet affordable healthcare services.

Banking

Smart contracts can be used to automate all major financial operations. This will lend much-needed transparency and accountability to financial structures across the globe. As well as curb misuse of power that has at times transformed into a financial crisis like the 2008 Housing Crisis.

Supply Chain

Smart Contracts can better supply chains by more than a few factors. They can enable

Real-time visibility and monitoring of products/services to the granular levels.

Render cost-effectiveness to supply chain models by providing important insights.

Reduce Risk of theft and fraud.

Real Estate

Real Estate is a good indicator for the current state of the economy. Smart Contract brings transparency and credibility to the real estate market. Especially in developing economies where real estate is a good investment black money hoarders.

FOAM is a smart contract powered blockchain solution for making property transfer/leasing as well as financing and funding more transparent and less taxing.

In addition to the above, Smart Contracts can drive social change too. They can be important tools for hosting free and fair elections at a time when even 2017 US Presidential Election is also under scrutiny for foreign meddling.

Last but not least, ‘one smart contract for all’ can be used for standardizing and optimizing public utilities like renting and leasing of cars, hotel rooms, etc as well as making government recruitments and contract processes more transparent.

In conclusion, we can say that blockchain is still in its infant stages. What we see unfolding before our eyes at the present moment is just the tip of the iceberg. In hindsight, Blockchain and Smart Contracts promise a more transparent and accountable future for the main pillars of humanity i.e Governance, Finance, Transportation, Communication and Entertainment.

