Many have heard about smart contracts, but not everyone knows what they are. In this article, we will answer the question of what is a smart contract, analyze the main use cases, their strengths and weaknesses in detail, as well as the future of this technology.
It is possible to set up a smart contract to buy stocks, cryptocurrencies on an exchange cryptocurrency service, or any other product at a fixed price for a specified period of time.
Registration and change of ownership
With a smart contract, the necessary documents can be registered on the blockchain to create ownership from the start and change ownership through smart contracts. Sweden is already testing such a platform to achieve this goal, and in the Netherlands, ABN Amro is developing a real estate system based on this technology.
Smart contracts allow the creation of a digital ecosystem for exchanging energy. Thus, the sources of electricity or fuel will be linked to smart contracts only between individuals or participating organizations, which in turn can personalize each customer’s consumption. For example, Wien Energie GmbH, the largest energy company in Germany, and Endesa, the largest in Spain, are already testing this utility.
When rights to a product or service are shared, income distribution can be difficult. Blockchain smart contracts can not only facilitate these processes but also automate them. For example, a new type of smart contract in the UK has already been developed, designed explicitly for intellectual property in the video game industry.
This sector will require shared oracles of trust between the insurer and the user. Still, the payment process in case of incidents could be automated, thus freeing up paperwork and valuable time. Law firm Hogan Lovells has already tested this for earthquake insurance.
Trusted third parties are no longer required for any kind of betting. Two or more parties can use a smart contract to enforce conditions.
The results of any poll, from a trivial question to government elections, can be reliably and accurately recorded and verified. Other than that, you can even set immediate consequences for those votes based on the results.