Alok wanted to improvise his knowledge about smart contracts. He read numerous articles but wasn’t clear how it works. He wanted someone who could make him understand the dynamics of smart contracts. Teerth understood Alok’s dilemma and decided to help Alok understand the fundamentals of the smart contract.
Let us try to understand what all it entails.
Addressing the basics
Smart contracts are programs that run according to predefined logic and agreements. These programs run on decentralized networks with ledgers that cannot be tampered with or changed after a transaction is registered.
Smart contracts are a dependable method of transactions that necessitate trust, transparency, and anonymity among stakeholders.
- Smart contracts are programs that run on decentralized distributed ledger technologies (DLTs) and follow predefined logic and agreements.
- Platforms for intelligent contracts include Ethereum, Cardano, Solana, and Fantom.
- Smart contracts can aid in the reduction of document forgery and increase accessibility.
- Smart contracts are a good option for administrative payments because distributed ledger technologies (DLTs) are inexpensive to maintain.
- Smart contract-based supply chain technology is more efficient and can help unlock value while reducing waste.
Individuals and institutions have struggled with certificate and document forgery for years. Physical and digital documents are both susceptible to lose, and there are frequently no quick ways to authenticate certificates without contacting the issuer, which is time-consuming.
In cases where timely and secure authentication is required, smart contracts can help simplify the process by ensuring the authenticity of a certificate or document using the underlying distributed ledger technology’s explorer (DLT).
Using smart contracts to preserve and make documents accessible ensures:
- Patents and copyrights are verifiable and unbreakable because smart contract timestamps cannot be changed.
- The files are easily accessible.
- Documents exist on various computers throughout the network, and their validity can be easily verified.
Monetary transactions necessitate a high level of trust and transparency, which is especially important for businesses dealing with large volumes of financial transactions, such as insurance.
Payrolls in their current form for organizations operating in a global supply chain frequently lack self-sustainability due to the complexity of the worldwide banking system and the difficulty of paying employees and managing streams of transactions from different countries.
Smart contracts, which are transparent, secure, and inexpensive to maintain, provide solutions to these payment issues. Furthermore, they have a long lifespan and can be easily automated to suit whatever payment need process is in question, reducing financial mismanagement.
Health & agriculture sector
According to the Food and Agriculture Organization of the United Nations, more than one-third of all food produced worldwide is wasted, with an estimated cost of $940 billion. They estimate that approximately 957 million people in 93 countries do not have enough to eat.
Numerous cases of wasted medicine and materials in the health sector could have found use in other medical facilities but are not received due to a lack of a system.
Smart contracts could reduce food and medical supply waste. An IoT smart contract can be written to assign public keys to packages whose data is stored on distributed ledger technology, as well as the package’s location and, if necessary, the medical facility that owns it.
Distributed ledger technologies enable greater flexibility and resource management while increasing accountability and trust in our daily financial activities.
With smart contract implementation increasing to varying degrees across virtually all industries, smart contracts are a trend we can expect to become accustomed to.