The concept of smart contracts originated in 1994 when computer scientist Nick Szabo discussed how contracts could be embedded into computer codes. The emergence of Blockchain technology has made this an even more viable possibility. It ensures security and transparency of all records.
The efficiency of sharing and accessing smart contracts is what makes them so appealing among stakeholders. Smart contracts can automate, calculate and arrange payments, and then automatically carry out their terms and conditions. When obligations are met, the contract can be executed instantly, saving time, removing intermediaries, and allowing for multi-party consensus-based validation.
Kaleido was the first Blockchain platform to offer native smart contract management, providing a full toolkit with visibility on contract deployment. Smart contracts have the potential to transform many industries in the 2020s. Here are but a few examples:
Smart contracts can reduce costly errors. The ability for these contracts to automate workflows and sharpen calculations helps in reducing work hours as well. Santander InnoVentures reported on the benefits and opportunities that come with the newest financial technologies. Fundamental changes in the financial services industry’s infrastructure and processes will be made possible through smart contracts. They believe that distributed ledgers will become the preferred choice for managing volumes of transactions. These savings are expected to amount to $15–20 billion a year by 2022.
Smart contracts in this industry are used to record property ownership of any structure. They optimize transaction speed and efficiency by reducing the need for lawyers or brokers. Sellers can take charge of the process. Blockchain thought leader Rob Massey says that smart contracts allow for a more transparent and cheaper alternative to property title management. Title defects can get in the way of transfers which result in legal fees. However, smart contracts keep track of a property’s history, location, and all other important details that will be needed for title assessment. They help avoid fraud through encrypted codes which are tamper-proof and tighten security measures.
More healthcare institutions are gearing up towards reliable automation and up-to-date security measures. Hospitals are primary targets of cyber criminals since they hold a wealth of sensitive information. Even big names in the sector like UCLA Health have been victims of data breaches, amounting to 4.5 million patient records compromised. With this, many healthcare institutions across the US have begun prioritizing healthcare managers and administrators with specific skill sets to counter these. Considering that new technologies and innovative practices increase at a rapid rate, Maryville University points out that technical expertise in the medical industry is now more in-demand than ever before. There is the assurance that patients’ data will be safely kept, as well as new drug formulas and clinical trials that are in the works.
Elections have always had the potential for fraud - case in point, the 2016 US Elections. Blockchain voting systems could be the future of elections. By making voting safely and conveniently available through digital means, Blockchain voting systems could widen accessibility, encourage greater voter participation, and speed up the arduous process of tallying and reporting votes in some precincts. Smart contracts would be able to validate voters’ identities to prevent multiple casted votes, which is a frequent goal of election hackers.
Millions of dollars are spent every year on processing claims in the insurance industry. Even more money is wasted due to fraudulent claims. Smart contracts strengthen claim processing through frequent checks in errors and help in administering policies from individuals or organizations. Shorter processing times will result in lower costs fo consumers – including premium rates. Lloyd’s of London confirms that insurance companies will also be able to fill in the gaps in coverage that come with the process, as they will be able to manage risks from corporate buyers much better.
There are a number of other uses for smart contracts, such as peer-to-peer transactions, product development, and stocktaking. There is still a lot of room for improvement and innovation, but the growing adoption of smart contracts continues to highlight the transparency, accountability, and efficiency that they were intended for.
Exclusively written for Kaleido.io
By Ross James