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Blockchain and the development of smart contracts are changing the world as they revolutionize business practices. It is economically efficient and can easily simplify transactions, eliminate intermediaries, and better align business interests.
It cannot be denied that the disruptive potential of blockchain and self-executing smart contracts is bringing potential change to the business and legal landscape due to their immutable and irreversible characteristics.
There are several architectures for the development, distribution, and management of blockchain application smart contracts. For example, it can link smart contracts to different payment systems or digital exchanges or it can be kept on the blockchain or in a shared ledger.
According to a report, the global smart contracts market is projected to reach $1460.3 million by 2028, from $315.1 million in 2021, at a compound annual growth rate (CAGR) of 24.2% during the forecast period (2022- 2028).
Now, let us understand the use cases of smart contracts and how the development of smart contracts is helping businesses grow.
Smart contract use cases
Different industry verticals are taking advantage of the development of smart contracts as they change the way a company operates. They help increase speed, transparency, and security across all departments in the organization. Some of the use cases of smart contracts are as follows.
Funds are transferred from the main account only if approved by members. Multisig contracts are the best solution for sharing ownership as they provide distributed control over funds. Multi-signature contracts also avoid single points of failure, as each sensitive transaction requires the approval of a certain number of parties.
Smart contracts can store important information and maintain their own permanent storage. Data stored on the blockchain , such as Ethereum (ETH) , is unique, immutable, and cannot be changed. You can use them to maintain records, automatically renew and release them based on set parameters.
Third Party Assistance
Although smart contracts eliminate third-party involvement, it is not possible to completely eliminate them. They take different roles in the network.
For example, the attorney will not prepare individual contracts but will be required in development to understand the terms required to prepare the contracts. Also, smart contracts on a network can communicate with each other similar to a software library.
Codification of financial obligations
Coding of financial obligations is done primarily for the management of user agreements. For example, providers can code redemption rules into the smart contract if a person wants insurance.
How the development of smart contracts helps companies grow
Smart contracts are a new way to conduct business transactions and agreements online securely. Smart contracts are helping companies move into the digital age and take advantage of the concept of decentralization to streamline operations.
Let’s learn the benefits of smart contracts that help businesses grow.
Developing smart contracts for your business allows you to automate your business process. It helps you save time, reduce costs and eliminate any errors.
Payments are released only when both parties meet and verify pre-established conditions. Smart contracts help companies automate complex business processes and execute them with confidence.
Smart contracts are stored in an immutable and irreversible distributed ledger, providing an additional layer of security. Smart contract development vendors can also help you incorporate additional security features such as multi-factor authentication and data encryption. In addition, no one can control the funds of other participants since each transaction is validated after reaching a consensus.
Greater trust and transparency
Smart contracts are based on blockchain technology that offers full transparency of transactions. All parties involved can view their terms and conditions along with transaction history. Helps build trust and better relationships with existing or new customers and partners.
Save operating costs and increase efficiency
Third parties usually charge a considerable amount of money. Smart contracts remove the need for intermediaries, allowing businesses to interact and transact directly.
The automation provided by smart contracts helps eliminate redundancies and the need for manual intervention, saving time and money and increasing efficiency.
More control over processes
Automating your business processes through smart contracts gives you more control over transactions in real time. You can also enforce compliance with external regulations or internal policies. All contract transactions are stored in a specific chronological order that can be accessed along with the full audit trail on the blockchain.
Blockchain and smart contract development for businesses is the need of the hour, regardless of your business domain. Leveraging this disruptive technology helps companies from different domains to create a transparent platform for all their stakeholders.
The promising use cases of blockchain and smart contracts are laying the foundation for the future of businesses by driving peak performance across different business operations such as supply chain management, quality control, warehousing data and security.
Sudeep Srivastava is the CEO of the inventive blockchain app development company and is someone who has established himself as the perfect mix of optimism and calculated risks. Having built a brand known for tapping into unexplored ideas in the mobile industry, he spends his time exploring ways to bring Appinventiv to the point where technology meets life.