Smart contracts are one of the many technological innovations that have come about due to Bitcoin and its revolutionary blockchain. People, businesses and governments are beginning to pay close attention to smart contracts and their capabilities. Cryptocurrency platforms such as Ethereum and Qtum provide the ability to code smart contracts on their respective blockchains. This new technology is what’s making many cryptocurrency platforms explode in value.
Smart contracts are self-executing contracts that take place on the blockchain. There are many areas where smart contracts will eventually dominate. Financial applications are well-suited for smart contract usage. Any financial business that requires the services of notaries, agents and brokers, to do business, is going to save time and money with the use of smart contracts.
Right now, the most popular smart contract platform is Ethereum, but that can easily change in the future. Qtum, EOS, Ethereum Classic, and Cardano are already showing a lot of promise and potential. For example, Qtum already uses proof-of-stake to verify its blockchain transactions, which is something Ethereum is looking to implement in the future. Qtum already holds the title for having the third largest number of transaction validators (nodes) of all the cryptocurrencies. The first is Bitcoin, and the second is Ethereum. Qtum is perfectly positioned to gain a foothold in one of the largest economies in the world (China). Once that occurs, Qtum is likely to surpass Ethereum.
Smart contracts resolve the issue of trust in the financial arena. They save time and money because of the efficiency that they provide. If you need a deal completed between you and a business partner, you can use a smart contract to ensure that the deal gets completed fairly. By coding a smart contract, you won’t have to spend time and money hiring a third party to ensure that the deal is completed according to the agreed-upon terms. You won’t need a broker or lawyer to oversee that the terms of the deal are met. A smart contract will ensure that you get the money, once your end of the bargain is fulfilled. It will also ensure that the second party gets their property, once they send you the money. All this is completed by the self-executing smart contract. Certain coded requirements will trigger the smart contract to self-execute.
Smart contracts are relatively simple and secure. If a dispute arises in the future regarding the deal, both parties can look back at their smart contract, which was recorded on the blockchain, and review exactly how the deal was closed. Many mistakes can be avoided when using this up-and-coming technology. When you use paper forms, items/ words can be changed, and signatures can be forged. Using paper increases the likelihood that critical mistakes will occur. Human errors are very common and we’re all familiar with them. Additionally, those paper forms can be destroyed by anyone with little effort. That’s not the case when using a smart contract. Information stored on the blockchain is immutable. Nothing can be changed, nor can it be erased from the blockchain. That’s a basic feature of any blockchain. Thousands of copies of your contract will exist (soon to be millions), which decreases the chances of fraud to virtually zero.
Smart contracts can be used to execute a number of business deals, such as stock purchases, property deals and transfers of titles. As smart contracts grow, and the technology becomes more widely adopted, we will begin to see many more financial applications. Some of the largest companies in the world are already experimenting with blockchain technology and smart contracts. Some of those large companies, include Walmart, Microsoft, Facebook, Google, IBM and Amazon.
If you’re in the financial sector and interested in cutting costs, then smart contract development is something you need to investigate. To get started, contact a qualified dApp developer and put together a smart contract development team. With the proper smart contract, you’ll be able to take your efficiency to another level, and that translates into more money in your pocket.