Smart contracts drive the new wave of innovation in financial processes and business dealings.
Smart contract technology is reshaping conventional industry and business processes. Being embedded in blockchains, smart contracts enable the contractual terms of an agreement to be enforced automatically without the intervention of a trusted third party.
Their benefits improve the efficiency of business processes and reduce the risks, while cutting down administration to save services costs within the financial sectors.
You may be wondering, “alright… so what does this all mean? it sounds like more computer program code.” And it is.
Smart contracts allow us to no longer rely on lawyers to execute and enforce contracts. Instead, we rely on the computer code written in the contract and the computer (node) to enforce the contract. For individual privacy and security features, we should apply the following, reiterating: We the individuals rely on the computer code written in the contract and the computer (node) to enforce the contract.
Fundamentally, a smart contract is a self-executing digital contract. The idea of a smart contract is to be able to take a regular contract, convert it into readable format that a computer can understand, and the computer would be able to automatically enforce the smart contract based on the various parameters and rules set out in the contract.
Smart contracts have an array of use-cases, some of which are still being discovered and explored at the time of this content being written. We still don’t know the full potential to how smart contracts can be used, in the same way that it would be nearly impossible in 1998 to know the full extent of how individuals would use the internet and what they would develop on it. Furthermore, individuals have some ideas of how smart contracts can be used based on smart contracts that have already been built using smart contract platforms.
One of the known smart contract use-cases is Initial Coin Offering (ICO). Basically, when a new cryptocurrency or crypto token is released, its creators offer a limited (some, unlimited) number of units to investors in exchange for wherewithal. ICOs are fantastic methods for raising development capital for new coins quickly. If there is enough demand given during an ICO, the crypto coins/tokens can be sold and traded on cryptocurrency exchanges. ICOs are a credible method to fund new crypto related projects, and there have already been many successful projects with more on the way. Do notate that everyone is creating ICOs these days, and many of them lack the solid basis they require to develop and make the investment worthwhile. As a result, you should conduct extensive research and analyze the crypto project and the teams before considering investing.
Sooner than later, the development of smart contract might be interpreted as a beginning of a general shift from traditional paper to self-executing code agreement. There is no doubt that smart contracts are a medium to execute transactions that are simple in nature, and which do not require interpretation or human intellect. As global digitization progresses, we will see the expansion of smart contracts with blockchains beyond its current implementation in directions that will enhance financing and global business, as well as the operation of law.
Crypto Security Circle | CSC has been utilizing smart contracts and distributing votes on different chains within platforms and ecosystems. It’s one of the benefits of being a member, begin securing your financial wealth right now (CSC makes it simple for you).