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Learn How Smart Contracts In Blockchain Redefine Value Exchange

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By Author: Block chain council
Total Articles: 24
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Ever since Blockchain came into the picture, we have seen a steady rise in its acceptance and applications. It is the new age internet which is transforming the industry like never before. While the world is still accepting the idea of digitization, it is also slowly picking up the pace of making way for Blockchain to become the mainstream technological support in running different business operations.
Although the initial use of Blockchain was limited to a cryptocurrency exchange, this has transformed over a period of time, and today we can find a drastic increase in the application of this technology. At the same time, we cannot miss mentioning the part that Bitcoin remains an integral part of Blockchain.
When we talk about Blockchain, then there is a lot to discuss it, we have seen its applications in the field of medical science, finance, supply chain etc. But it all boils down to the fact that Blockchain offers certain features which makes it one of the most sought after technological support. Some of the key features that Blockchain boasts about are :
• Immutability
• Transparency
• Time-stamping
• Decentralization
• No third party involvement
• Smart Contracts
Here we will be focusing on Smart Contracts and how it is redefining value exchange. While the internet is all about the exchange of information, Blockchain is about value exchange.
What are smart contracts?
Before we go ahead and understand how smart contracts are going to redefine the value exchange process, it is important to gain some information about what are smart contracts.
If we have to put it in simple words, then smart contracts are digitized contracts which are a replacement of the third party which are otherwise involved in the conventional agreements.
It is a pre-programmed agreement; the execution of the same takes place once the conditions agreed by the involved parties are met. This not only nullifies the need of having the third party but at the same time, the entire process is transparent and free from any tampering. Since Blockchain forms the base of smart contracts, the information that once enters the ledger becomes free from alteration, and hence, smart contracts are highly secure and free from having. This removes the ambiguity, which otherwise haunts the contract execution and its terms and conditions.
How Does It Change Traditional Contracts?
It is very important to understand why there has been a steady inclination of Blockchain and smart contracts. Well, one of the reasons for the same is the drawbacks present in conventional contracts and agreements. Let’s take an example of the real estate sector to find out how smart contracts can be a transformational change.
In any real estate exchange process, the brokers or the agents have to go through a complete process of paperwork and other legal formalities. It not only consumes a lot of time but at the same time there is a greater probability of information alteration. Moreover, the agents also hold payment of one of the parties. In this scenario, we have to solely trust the agent for a lot of work, including the money. But all the real estate transaction boils down to how trustworthy is the agent. Now let’s replace the agents with smart contract. In this case, all the work of a real estate agent is taken over by the smart contract. In this contract, both the parties are added, and the contract is programmed, which has all the conditions specified by the two parties. One of the conditions is that the transaction takes place as per the details mentioned on the smart contract.
Once the conditions are met, the smart contracts get automatically executed, and the transaction flows along with the transfer of ownership takes place. There are several advantages to this process:
• There is no need to rely on the third party for the transaction.
. Since the entire information is present on a smart contract which works on Blockchain Network, it is difficult to delete or alter the information. It becomes immutable, decentralized.
• It consumes lesser time and money. Since the third party is not present, all the interaction takes place directly between the two parties.
• Once the exchange takes place on Blockchain, it again gets stores on the DLT and becomes permanent and unalterable, which again adds to the authenticity of data.
Wrapping it up- with a dire need to have a system which is highly transparent and works towards the benefits of both the parties, smart contracts have emerged as a popular medium of exchanging values without worrying about losing the information to the third party.


More About the Author

Blockchain Council is an authoritative group of subject experts and enthusiasts who are evangelizing the Blockchain Research and Development, Use Cases and Products and Knowledge for a better world. Blockchain technology is more than just a technology, which is emerging rapidly with a vast scope in the future. Blockchain acts as a financial network, software, distributed ledger, etc. Owing to this multitude of benefits and features, companies are now shifting their centralized and traditional working system to this trending and futuristic technology “Blockchain”. Blockchain council creates an environment and raises awareness among businesses, enterprises, developers, and society by educating them in the Blockchain space. We are a private de-facto organization working individually and proliferating Blockchain technology globally. Visit here for more details@https://www.blockchain-council.org/

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