WHAT ARE SMART CONTRACTS: 

They are very similar to traditional contracts. It is basically a code of a computer, we can implement logic in it like if-then,if-else. We can implement every logic in the smart contracts.  Whenever we deploy a smart Contract it is always deployed at the Ethereum Blockchain. They are basically used to automate the execution of an agreement, so that all the contestants in it can certain of the outcome, without any sort of time loss. 

It is also known to be the self-execution program that relies or depends on if-then logic. Moreover if once your contract is deployed then after it no one can change or alter it. When all the requirements in the Smart Contract are fulfilled then the transaction can be done, otherwise is no chance.

TYPES OF SMART CONTRACTS:

1)SMART LEGAL CONTRACTS: 

These contracts are lawfully compulsory and demand the parties to satisfy their contractual obligation. There is a chance that if the parties are unable to comply they can face strict legal actions

2)Decentralized Autonomous Organization(DAO): 

This Contract is fixed to some sort of rules that are written or coded into the blockchain contracts. These are open-source and their theory is said to be not altered or incorruptible.

3)APPLICATION LOGIC CONTRACTS (ALC): 

Another type of smart contract that enables all the devices to operate securely and independently is called an application logic contract (ALC). Moreover, it also offers much automation, and larger scalability at a cheaper cost. These contain application-based code, which is saved in sync with some other blockchain contracts.

HOW DO SMART CONTRACTS WORK:  

You probably are familiar with Kickstarter, the largest fundraising platform.  Kickstarter is basically a third party that sits between the product team and supporters. Moreover trusting a third party is required and compulsory. If the project gets successfully funded, then they can get their money refunded but on the other hand if once they fund it they can’t get it back until all the terms and conditions are fulfilled. 

We can program the Smart Contract so that it can keep all the received funds until a certain goal is reached. The supporters of a project can now easily transfer their money to Smart Contracts. If the project is funded successfully then the Contract automatically passes the money to the creator of the project. And if the project fails then the money will definitely go back to the supporters. And because the Smart Contracts are stored on a Blockchain so everything is completely distributed.

Why should we believe in smart CONTRACTS:

Smart contracts are stored in the blockchain. they have several properties they are immutable and they are distributed. Being immutable means that once a smart contract is created it can never be altered or can be changed again. 

And being distributed means that the output of your contact is validated by everyone on the network. So a single person cannot force the contract (to release the payment back before goal completion) to release the funds because other people on the network will catch this attempt and will mark it invalid. 

The concept is simple: no goal is met, so no releasement of the money. Tempering with the Smart contracts becomes almost impossible. Moreover, the other hand banks can also use smart contracts to issue loans or offer automatic payments. Furthermore, insurance companies can also use it to process certain claims.

SMART CONTRACTS EXAMPLES: 

TRACKING THE DETAILS REGARDING THE PROPERTY IN REAL ESTATE: 

Smart contracts are also used to save the property ownership structure. they enhance the speed of transactions by reducing the need for lawyers or brokers which can help you to save your amount. However smart contacts keep all the records of the properties such as the location of the property, properties history, and other important details regarding it. They have you against fraud and scams throw the help of encrypted codes which are really secure and temper-proof.

REDUCING THE NUMBER OF FRAUDS AND SCAMS IN THE INSURANCE INDUSTRY: 

Millions of dollars of money are wasted every year regarding the processing of claims in the insurance industry. But smart contracts help you as it enhances the claims processing through several frequent error checks. Moreover, it results in shorter processing time which will lower consumers’ costs as well as including with premium rates.

REDUCING THE COSTLY MISTAKES IN TRADE FINANCE:

Smart contracts can help to reduce costly errors by sharpening the Calculation and an automated workforce helps to keep its cure against errors. Around 17-23 billion dollars was saved in 2022 with the help of Smart Contracts.

SMART CONTRACTS ADVANTAGES:

Smart contracts offer many advantages to the users such as:

• TRANSPARENCY: Smart contracts are based on the blockchain procedure, they guarantee the immutability of data allowing the contracts to be done without any need to first know each other and also reduce errors and avoid execution of the contracts.
• COST REDUCTION: By using a Smart contract the customer does not need to rely on a third party to verify the terms which helps them to save extra charges and reduce the cost.
• SPEED: The absence of any sort of distribution regarding the intermediaries will help the customer to save time compared to the contracts that are done manually with the presence of the third-party system.
• AUTONOMY: Smart contracts offered Independence and freedom because by using the smart contracts there is not any sort of intervention from a third party which also saves time and offers cost reduction.

Applications of Smart Contracts

Businesses can benefit themselves by using Smart Contracts in a variety of ways:

Medications – Smart Contracts can aid in the reduction of problems regarding the transportation of medications. It achieves this by increasing transparency across the supply chain.

Supplier-Retailer Relationship – Smart Contracts play a main role in the development of positive relationships between suppliers and retailers. With time-consuming communication and increased transparency in the supply chain, it can aid in the resolution of disputes.

International Trade – Smart Contracts can aid or help to develop more user-friendly trading platforms. This would aid in the resolution of disputes and risk management.

SMART CONTRACTS CONCLUSION:

In the end, no doubt that the growth of smart contracts will bring many benefits to the future as it will reduce or minimize millions of indirect costs and also make the entire working system more faster and efficient. Moreover, in the future, it aims to provide well security that is superior to traditional contract law.

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