Smart Contracts: 10 Use Cases for Business
What is the easiest way to get things done? To find someone who succeeded and to repeat their actions step-by-step. What is the smartest way to get things done? To find someone who succeeded, to estimate their mistakes, and to come up with own strategy.
This rule applies to everything – work, relationship, house cleaning, dog training, pasta cooking, whatever else. You always have a choice, but the easiest solution is rarely the smartest one. If you belong to those who don’t stay stick to established schemes and who are not afraid of testing new patterns, then the time has come for you to find out how to use smart contracts.
No, smart contracts would not help you plant roses faster. At least, not now. But they allow you to get rid of redundant actions and make them run automatically. For instance, you need to pay $10 for a music streaming service on the 1st day of every month. You define these conditions in a smart contract, and, from now on, you can forget about payments. The contract would automatically withdraw money from your account and transfer it to the provider. As easy as that.
It’s not magic; it’s a bit of programming. A smart contractis a code that defines actions and conditions of their fulfillment. If all the prerequisites are met, the contract would be run, and it is guaranteed by the strict logic of computers and Ethereum blockchain.
Automatic payments are the first to come to mind when we speak about smart contracts. But their area of application is much more extensive. Can you guess which advantages this new way of managing processes brings to businessmen and ordinary people?
Benefit of Smart Contracts
We’ve already agreed that smart contracts make different processes run automatically. You don’t need to supervise the fulfillment of the contract; math does it for you. It sounds liberating, doesn’t it?
Hence, owing to smart contracts, processes become:
- Automatic – whatever is defined in a contract will happen
- Fast – it will happen within seconds
- Direct as no intermediaries are involved
- Cheap – and no fees are to be paid
- Transparent – and all the information will be registered on the blockchains
Numerous smart contract application examples show us how beneficial they are when being implemented in the proper sphere with the right intention.
10 Areas of Application
When it comes to smart contracts, the number of use cases in industry and everyday life is almost endless. Let us tell you about the most interesting applications and show you how the implementation of smart contracts in business is already changing the world we live in.
Today, different institutions hold different details about your life – bank records, ownership rights, job details, demographic facts, etc. To collect all this information in one file, you would need to carry a huge pile of papers, references, copies. It’s pretty inconvenient, especially, if you have to pass an identity verification.
Smart contracts solve this problem and allow to keep all the data on one person in one place. Whenever something happens to you, it would be registered on the blockchain to keep your identity holistic. Owing to this, KYC verification would become instant. And your privacy wouldn’t be affected as you are the one to decide which information to disclose.
Don’t you feel annoyed when you’re trying to make a money transfer, and you need to cover a fee, pay a percentage of the sum you send, and then wait for a few days while the transaction is being processed? Even though the modern banking system works rather smoothly, its imperfections are hard to deny.
Smart contracts do not require any intermediaries. Hence, you pay no fees. As there’s no bureaucracy involved, transactions become fast and cheap. Moreover, the transparency guaranteed by the blockchain reduces the possible risks of fraud.
An image of a guy running to a tax office with a pile of paper just to find that it’s closed is a source of endless jokes in American cartoons. But when you are in the shoes of this guy, you’re unlikely to laugh.
Automatic payments triggered by smart contracts would save you from fines and prevent you from committing a crime unintentionally. At the same time, all the data about taxes is recorded on the blockchain and available for everyone who is determined enough to check the database. The transparency of the tax records makes cheating almost impossible.
May you get into a minor car accident, the first thing you would worry about is an insurance payment. If the accident is not your fault, you expect the guilty side to cover repair expenses. But what would you do if this person denies their fault? Your chances of getting a refund are not too inspiring.
May the car be equipped with an IoT device reporting its location, speed, time of the accident, you would have no reasons to worry. In case you’re right, the data on the blockchain would prove your words, and you would get your payment automatically.
Real Estate and Land Titles Recording
Real estate deals, especially, cross-border ones are way too painful for a normal person to handle. You don’t want to get involved in months of legal negotiations, paper signings, and other bureaucratic nuances related to transfers of ownership rights.
With the help of smart contracts, this pain is easy to avoid. The centralized registry of the property would allow you to buy and sell real estate without intermediaries and to pass ownership rights within minutes. In a few clicks, you would find the apartment you want, pay for it, and get the proof you’re the new owner. You don’t even need to meet with the seller.
When you come to the store to buy seafood, you never know 100% how fresh it is. It might be written that it has just arrived from Denmark. Your options are not too impressive – you may either believe it or not.
Smart contracts combined with IoT devices are about to make a revolution in logistics and supply chain. With their help, tracking of the way products pass before they arrive at the retail spot becomes automatic and transparent. At any given moment, you know where the goods are, in which conditions they’re stored, and when they would arrive. It applies not only to food products. For instance, this technology can be used for tracking retail goods, responsibly sourced coal, oil, gold, etc. Owing to the blockchain, vendors become more trustworthy and the risks of fraud decline.
You come back from work, and a box with the products you need waits near the door. You turn on the TV, and the movie you wanted to watch is already downloaded. Your alarm is about to ring, and your curtains open automatically a second before it. A smart house is no longer a setting for a sci-fi movie, and, due to smart contracts, it becomes more automatic and reliable.
IoT is one of the most inspiring smart contracts examples as it is tightly connected with our daily routines.
Gaming and Gambling
The Internet is full of offers to play online slot machines or to check out new virtual gambling rooms. When you play for free, you don’t care too much whether you win or lose. But when you play for money, you start thinking about payments and ways of getting your winnings.
If a virtual casino adopts smart contracts, you would have no reason to worry: whenever you win you get your reward, whenever you lose you can’t fool the system and keep your money. Gambling becomes transparent and honest. The same algorithm applies to any paid computer game and e-sports.
Authorship and Intellectual Property Rights
Piracy and authorship violations are a big issue within the entertainment industry. Musicians, photographers, writers, and other artists are deprived of their royalties due to the dishonest exploitation of their intellectual property.
Making a transparent registry of authorship on a blockchain is an ambitious example of how smart contracts may improve the current state of affairs. For instance, whenever someone downloads your novel or stock photo, you get a refund automatically. Moreover, your rights are registered securely, and no one would be able to alienate them.
Life Science and Health Care
The profit brought by smart contracts is not only in secure and fast transactions, automatic payments, and enhanced daily routines. Can you believe that such contract may save your life, for instance, prevent a heart attack? Actually, it can.
Let’s say, you wear a health tracking bracelet that registers your heartbeat and blood pressure and transfers this data to a blockchain regularly. When any of the indexes exceeds the norm, a smart contract triggers a notification you receive on your phone. In such way, you will be warned that something goes wrong and you would have enough time to take medicine and prevent a crisis.
Moreover, a blockchain is convenient for secure storage of clinical trials results as it guarantees the privacy of the patients.
The Sky Is the Limit
It’s not hard to guess that smart contracts use cases are not limited to the ones mentioned. You may come up with any idea of how to exploit smart contracts on a blockchain, for example, how to keep track of academic performance at schools. And it’s just one of the billions of possible implementations.
Today, numerous enthusiasts work on the projects aimed at solving the acutest problems with the help of the blockchain technology and smart contracts. But the latter have their imperfections too. We can’t forget that a code of any contract is written by a programmer. Hence, we can’t get rid of a human factor entirely and can’t be sure that there are no mistakes in the contract.
After all, no one said it would be easy to change the world and to enhance it with new, better ways of solving usual problems. It’s a lot of work ahead of blockchain engineers and smart contract developers. And some time would pass before their achievements are appreciated.