What if I say that you don’t need a Lawyer for your contract signing anymore? Yes. You heard it right. Blockchain has a potential to replace lawyers with the help of it’s feature called smart contracts.
The property of decentralization is the key to this technology. This is one of the best property of blockchain. The reason behind this, is Blockchain being a decentralized technology which is shared by parties with permission. This eliminates the cost of intermediary thus saving your time, cost and other conflicts.
Blockchain has its own drawbacks. Still, many banks and Government organizations are opting for blockchain technology because it is faster, cheaper and secure as compared to traditional systems. These self-executing contracts are also called as blockchain contracts or digital contracts. Contracts which are actually software programs are executed automatically when the certain conditions are met.
Basically smart contracts are converted into a computer code and are distributed over the network of computers that runs the blockchain. Thus, this network of computer supervises or monitors it’s execution. This may also include the transfer of money in the form of cryptocurrency or delivery of a particular service.
Smart Contracts in Blockchain – Concept Explained
Let’s compare traditional system with Blockchain system. Traditionally one would visit a lawyer/notary for any kind of contract work. Lawyer will take your information and prepare a contract specifying your conditions. Here notary will sign as a authority witnessing the contract. You would then pay the lawyer for his/her services.
Switching to blockchain’s smart contracts technology, you just have to simply drop a bitcoin into the vending machine (i.e. ledger), and your expected service is offered to you. With this excellent technology, blockchain not only prepares the detailed agreement mentioning the rules and regulations but it also ensures the enforcement of the same.
The system works on if-then principle. if you are paying through a blockchain, you are sure of getting the service. Similarly, if you are delivering a service to somebody, then you are sure of getting the payment. All the process is monitored digitally by all the parties involved. Simultaneously, your agreements/ contacts are duplicated multiple times in encrypted forms. This saves you from the mess occurring on loss of agreement.
The concept of smart contracts by blockchain can be used by many industries including Government. Other industries who are largely getting benefited by smart contracts is Healthcare, Real Estate, Education, Industrial Manufacturing, etc.
How Smart Contracts in Blockchain work?
Smart contracts completely remove the middle man in any transaction. May it be an individual or financial organization. It connects the buyer and vendor directly. Following diagram shows how smart contracts work.
Why one should opt for Blockchain’s Smart Contracts? Advantages of Smart Contracts
Blockchain technology itself is the current and trending technology in the market today. In this, a smart contract is a major segment which has covered numerous applications as of now. Let’s discuss a few advantages of switching to smart contracts.
Comparatively Faster Smart Contracts in Blockchain
Speed is a major factor for which smart contracts should be preferred over traditional methods. Smart contracts eliminate lots of time you usually would have spent on preparing the documents manually thus saving you from all the paperwork.
Blockchain Smart Contracts are Safe and Secured
Smart contracts use the powerful method of Cryptography. You will save your contracts encrypted with the best hash algorithms. So hacking these contracts is next to impossible.
Backup and Recovery is easy in Blockchain Smart Contracts
Your data is duplicated at multiple places. So in case of any data loss, your backup can be recovered from your network. Everything is monitored automatically so trust issue is also resolved.
More Accurate Blockchain Smart Contracts
Smart contracts are prepared programmatically, so there are very fewer chances of errors. Also, there is no chance of manipulation by the third person since these contracts are executed automatically by the network rather than individuals who may be biased.
Blockchain Smart Contracts are surprisingly Affordable
Finally, the absence of intermediary saves you from the cost to be paid to them. Money or cryptocurrency is exchanged directly between two parties.
With all the benefits one is getting by employing this technology, you should definitely think about switching to smart contracts and Blockchain for your business. Or you may contact us for Blockchain Development in India
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