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Blockchain and the development of smart contracts are changing the world as they revolutionize business practices. It is cost-effective and can easily streamline transactions, remove middlemen and better align business interests.
There is no doubt that the disruptive potential of blockchain and self-executing smart contracts brings a potential change to the commercial and legal landscape due to their immutable and irreversible characteristics.
There are many architectures that exist for developing blockchain applications, distributing and managing smart contracts. For example, you can connect smart contracts to different payment systems or digital exchanges, or you can keep them on the blockchain or a shared ledger.
According to a reportthe global smart contract market is projected to reach USD 1460.3 million by 2028, from USD 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 deployment helps businesses grow.
Smart Contract Use Cases
Different sectors of the industry are leveraging the development of smart contracts as they change the way a business operates. They help increase speed, transparency and security across all parts of the organization. Some of the use cases of smart contracts are as follows.
Funds are transferred from the main account only if members approve. Multisig contracts are the best solution for ownership sharing as they provide distributed control over funds. Multi-signature contracts also prevent single points of failure, as each sensitive transaction requires approval by a certain number of parties.
Smart contracts can store large amounts of information and maintain their own persistent storage. The data stored on the blockchainlike Ethereum (ETH) it is unique, immutable and cannot be changed. You can use them to keep the records, renew them and release them automatically according to the defined parameters.
Third party assistance
Although smart contracts eliminate the involvement of third parties, it is not possible to completely eliminate them. They take on different roles in the network.
For example, the lawyer will not prepare individual contracts, but will be needed in the 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
The codification of financial obligations is mainly carried out for the management of user agreements. For example, providers can code buyout rules into the smart contract if an individual 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 help businesses move into the digital age and leverage the concept of decentralization to optimize operations.
Let’s learn the benefits of smart contracts that help businesses grow.
Smart contract development 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 the pre-defined conditions. Smart contracts help businesses automate complex business processes and execute them with confidence.
Smart contracts are stored in an immutable and irreversible distributed ledger, providing an extra layer of security. Smart contract development providers can also help you integrate additional security features such as multi-factor authentication and data encryption. Also, no one can control the funds of other participants as each transaction is validated after reaching consensus.
Greater 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 transaction history. It helps build trust and better relationships with existing or new customers and partners.
Saves operating costs and increases efficiency
Third parties often charge a significant chunk of money. Smart contracts eliminate the need for intermediaries, allowing businesses to interact and transact directly.
The automation provided by smart contracts helps remove 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 real-time transactions. 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 sector. Leveraging this disruptive technology helps businesses across industries create a transparent platform for all their stakeholders.
Promising use cases for blockchain and smart contracts lay the groundwork for the future of business by driving maximum efficiency across diverse business functions such as supply chain management, quality assurance, data warehousing, and security.
Sudeep Srivastava is the CEO of the blockchain application development company Appinventiv and it is someone which has established itself as the perfect blend of optimism and calculated risks. Having built a brand known for harnessing unexplored ideas in the mobile industry, he spends his time exploring ways to bring Appinventiv to the point where technology meets lives.
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