Blockchain and smart contract development are changing the world as they are revolutionizing business practices. It is economically efficient and can easily streamline transactions, remove intermediaries and better aligns business interests.
There is no denying that the disruptive potential of blockchain and self-executing smart contracts is bringing a potential change in the commercial and legal landscape due to their immutable and irreversible characteristics.
There are several architectures that exist for blockchain application development, distribution and management of smart contracts. For instance, you can link smart contracts to different payment systems or digital exchanges or can be kept on the blockchain or a shared ledger.
According to a report, the global smart contract 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’s understand the use cases of smart contracts and how smart contract development is helping businesses grow.
Smart contracts use cases
Different industry verticals leverage smart contract development as they change how a business operates. They assist in increasing speed, transparency and security across all organization departments. A few of the use cases of smart contracts are the following.
Funds are transferred from the primary account only if members approve it. Multisig contracts are the best solution for sharing ownership as it provides distributed control over funds. The multi-signature contracts also prevent single points of failure as every sensitive transaction requires approval from a certain number of parties.
Smart contracts can store hefty information and maintain their own permanent storage. The data stored on the blockchain – such as Ethereum (ETH) – is unique, immutable and cannot be changed. You can use them to keep the records, renew them and release them automatically as per the set parameters.
Though smart contracts eliminate third-party involvement, it is not possible to eliminate them entirely. They take different roles in the network.
For instance, the lawyer will not prepare individual contracts but will be needed in development to understand the terms required to prepare the contracts. Also, smart contracts in a network can communicate with each other similar to a software library.
Encoding financial obligations
The encoding of financial obligations is mainly performed for managing the user agreements. For instance, providers can encode redemption rules into the smart contract if a person wants insurance.
How smart contract development helps businesses grow
Smart contracts are a new way to securely conduct business transactions and agreements online. Smart contracts are helping businesses move into the digital age and leverage the concept of decentralization for optimizing operations.
Smart contract development for your business allows you to automate your business process. It helps you save time, reduce costs and eliminate any errors.
The payments are released only when both parties meet and verify the pre-set conditions. Smart contracts help businesses automate complex business processes and confidently execute them.
Smart contracts are stored in an immutable and irreversible distributed ledger, providing an extra layer of security. Smart contracts development providers can also help you incorporate additional security features such as multi-factor authentication and data encryption. Also, no one can control other participants’ funds as each transaction is validated after a consensus is achieved.
Higher trust and transparency
Smart contracts are based on blockchain technology that offers complete transparency of transactions. All parties involved can view its terms and conditions along with the transaction history. It helps build trust and better relationships with existing or new customers and partners.
Saves operational costs and increases efficiency
Third parties often charge a considerable chunk of money. Smart contracts eliminate the need for intermediaries, allowing businesses to interact and transact directly.
The automation that smart contracts provide helps remove redundancies and the need for manual intervention, saving both time and money and increasing efficiency.
More control over processes
Automating your business processes via smart contracts gives you more control over the 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 complete audit trail in the blockchain.
Blockchain and smart contract development for business is the need of the hour, irrespective of your business domain. Leveraging this disruptive technology helps businesses of different domains create a transparent platform for all their stakeholders.
The promising use cases for the blockchain and smart contracts are laying the groundwork for the future of businesses by driving maximum output across different business operations such as supply chain management, quality assurance, data storage and security.