Blockchain is the technology that has solved the problem of generating reliable transactions through its distributed database.
The application of AI systems in businesses could revolutionize how people relate by promoting open data policies among them.
Smart contracts, for their part, are not digitized commercial contracts, they are the flow diagrams of lifelong operational processes, programmed, automated, and executed without human intervention. In this way, they are responsible for managing the link between two or several parties in a secure, efficient, and scalable way. They work through executable code on the blockchain to facilitate, effectuate, and enforce an agreement.
This technology will bring great benefits with the power to turn traditional agreements and relationships into effective, secure, and digital automation.
But what exactly is a smart contract?
A smart contract is a computer program that digitally facilitates the verification, control, and execution of a predetermined agreement of a blockchain development company platform when these agreements are concluded and all transactions are processed without intermediaries.
Like traditional contracts, smart contracts define rules and sanctions around an agreement and automatically enforce these parameters.
It must be said that, although the blockchain has emerged closely linked to the world of bitcoin and cryptocurrencies, in my opinion, the power of the use of smart contracts is seen more in the environment of industrial and logistical processes, especially in management. of supply chains.
Benefits of smart contracts in business environments
The business applications for smart contracts are endless. This is a method for increasing transparency and enhancing security while eliminating error and reducing red tape. Here you can find some specific general benefits of using smart contracts as part of the process of generating agreements using blockchain technology:
- Autonomy: Being a technology of a decentralized nature, smart contracts do not need any external party or human intervention in the process.
- Trust and Transparency: The nature of smart contracts is that they are self-executing and a source of unbreakable trust. In this aspect, trust is based on a source of data and infrastructure that guarantees the confidentiality, integrity, and availability of data throughout the life cycle of the contract. Transactional and contractual data are stored, which are reliable and transparent for all participants. This can be a distributed ledger, a blockchain, or a traditional on-premises or cloud database.
- Security: Through blockchain technology, unalterable ledgers are created that provide reliable and definitive proof of transactions. These books ensure that transactions are set in stone and that they are unalterable. Thanks to distributed node blockchain technology, smart contracts duplicate all transactions so that all parties have a record. The probability that all those involved will suffer data storage failures is non-existent.
- Effectiveness and profitability: Thanks to the fact that intermediaries are not needed, the execution of bureaucratic procedures and procedures can be effective, fast, and precise. Smart contracts are paperless and swift, unlike their conventional counterparts in which they mostly occur. Human beings are subject to errors but the aforementioned automated agreements are not. In order to convert AI-like text to human-like text you have to as well lower perplexity while maintaining higher burstiness even while keeping the element HTML at the same level. The best thing is that while errors are avoided, management costs are significantly reduced.
Examples of smart contract applications
- Smart Contracts for product development
An interesting use of smart contract development is the ease of keeping records during the stages of product development. When two parties sign the contract, activate it, and track it throughout the project, any other relevant information is recorded in the contract.
For example, if the parties agree to payments at certain milestones, when the agreed phase is reached the contract releases the transfer. Without a doubt, an alternative for companies of all sizes, whether selling products or professional services.
Another interesting aspect is the ability to keep information secure and prove its origin. This has an impact on intellectual property issues. When a company has invested large amounts of resources in the development of an idea or project, it needs to be protected. This type of security can be completed through a Smart Contracts solution complemented by identity verification technologies.
- Smart contracts for financial management
This technology holds multiple ways to transform traditional financial services. One of these is the incorporation of critical accounting tools and the elimination of the possibility of manipulation of accounting records.
They can also facilitate the participation of stakeholders in decision-making transparently and horizontally. Additionally, they assist in trade commission processes, where funds are transferred once settlement amounts are calculated or sales computation is performed.
- Ease of peer-to-peer transactions
Smart contracts can be used for a wide range of peer-to-peer transactions. This reasoning is what led to the creation of the Ethereum Project and other similar companies. Anyone with interest and the internet can find use for platforms like these which they can develop and reach agreements on smart contracts whereas these contracts are always functioning until several conditions agreed are met. Typically, these are money transfers, but this is not always the case.
Until now, smart contracts have been used for everything from launching ICOs—a type of cryptocurrency financing—to selling products on the Internet. Businesses are using smart contracts to insure against unmet expectations, such as missing deadlines or failing to deliver.
- Business Process Automation
By integrating workflows and mechanisms through a data model, smart contract applications can automate processes and increase data exchanges between different systems and participants.
- Build a resilient supply chain
Supply chain solutions can use smart contracts to streamline the flow of goods by automatically triggering the next steps when conditions are met, such as shipping, delivery, and data on conditions during handling.
Traditionally, supply chains are very inefficient due to paper-based systems and bureaucratic processes, where forms go through multiple channels to obtain approvals. All this paperwork is necessary due to a problem of lack of trust between the parties involved in the supply chain. Supply chain management is made up of multiple links generally distributed throughout the world. As each link does not trust the other, a large amount of paperwork and delays are generated, making the global chain very inefficient in time and costs.
Blockchain technology can nullify such drawbacks by delivering an accessible and secure digital version to the parties involved in the chain in real-time. Smart contracts and blockchain technology can be used for merchandise authentication, inventory management, chain traceability, automation of payments and tasks, etc. In short, they allow us to create an efficient, paperless, transparent, and traceable supply chain in real-time. In this sense, the joint application of IoT, AI, and blockchain opens up an immense world of opportunities for the innovative and efficient management of supply chains.
Smart abstracts and, in general, the solutions proposed by blockchain technology can mark a before and after for business development and serve as flow drivers in process management. They open the opportunity to address a unique way of solving problems, developing businesses with transparency, and generating savings in time, money, and effort.
The decentralization, self-execution capability, and verifiability features of smart contracts allow parameters to be executed on a peer-to-peer network, where each node has the same hierarchical level, so no one possesses special authority. This generates horizontal relationships focused on trust and an agreement where mutual benefit is visualized during each step of the process.
