Removing friction is a buzzword in many businesses. Some others call it the resistance. No matter what you call it, your business certainly suffers from a lack of streamlining your processes. Documentation can mean a lot of red tape and too many levels to go through for things to happen.
Which Is one of the biggest reasons to use smart contracts on the blockchain.
A smart contract can cut down on how much paperwork is done, on storage and security of important documents and in the handling of agreements. All while increasing privacy.
In this article, I will go over several of the ways that using smart contracts can help you reduce the barriers to growth by using smart contracts.
1 - What is a smart contract
The smart contract is one of the pillars of the blockchain. It is fundamental for every transaction. While most people are focused on today’s value of Ethereum and what the safest Bitcoin wallet is, the smart contract concept goes underappreciated.
A smart contract is simply an encrypted code that is publicly available for anybody to see of every transaction made on the blockchain. The contracts are available on the distributed ledger and decentralized so they can’t be manipulated.
Since the blockchain is not one server but several million, there is no way for the ledger to be hacked and not seen by everybody else on other computers.
Because of this it is a truly trustless system. Two parties do not have to trust each other as the process is immutable.
2 - Benefits of smart contracts
Besides the trustless aspect, one of the biggest benefits to a business is convenience. Since the ledger is the safest place to store the documents, there is no reason to have a dedicated server for storage of sensitive documents. Tracking the documents is also easier since they can be searched and brought up in an instant.
You also have more control over the document. It can’t be erased by accident, a server can’t go down and it can’t be put on a portable hard drive that gets degraded over time. It is instantly accessible at all times from the blockchain.
It works great as an escrow device. Since it relies on an if-then scenario, two parties can use it as an intermediary for a payment. If there is a service that is being performed, then the payment gets sent to the recipient when the work is completed. And the contract for the work can also be seen by everybody so the customer in question can’t deny sending the money once the work is complete.
You’ll also save money since there is no need to use third parties for anything involving the contract. Once everything is agreed to, it can’t be changed so there is no need for a third party gatekeeper. You don’t even need a notary to off on any of the details.
Lastly, it doesn’t matter what industry your business is in or how small it is. Anybody can use a smart contract and enjoy all the benefits.
Comments
Log in or sign up to join the conversation.