“Conclusion: Looking to the Future
When it comes to utilizing blockchains, a majority of the existing usage cases currently only take advantage of a blockchain’s ability to transmit data that is traditionally financial in nature. When it comes to using a blockchain in the near future, however, it is important to take into account the possibilities that smart contracts promise as well.
While real world examples of current smart contracts are rather few and far between, a good example is that of the automated deduction that is made from the checking account provided to you by your bank of choice. While this doesn’t use a decentralized database, the process remains the same and the deductions come out of your account without any other action on your part. In this case the bank can set up deductions from your account without your consent because they are the centralized authority when it comes to that database.
This is precisely why smart contracts and blockchain were invented to take control of these systems away from those who have held it exclusively for so long. In a decentralized database, there would be no one to submit changes to your account without your permission because no one would have a vested interest in doing so, the advantages of which are obvious.
Legal use: When it comes to dealing with the standard legalese that is found at the bottom of many contracts, it can be difficult to determine exactly who needs to do what and when. Smart contracts can cut through all of this legal red tape by simply automating certain parts of the process to ensure x happens if and only if y happens first. There would be no need for boilerplate legalese because all of the specifics would be automatically handled by a computer program.
In addition to making the process simpler and more efficient, a smart contract will ensure that all of the actions that are taken are easily verifiable for everyone who has access to the blockchain that the transactions take place in. There is no room for posturing or debates about whether or not a specific action was taken at a specific time, only the facts of the matter and what was timestamped in easy to parse block form. While making certain types of contracts more easily visible for the layman would make certain transactions much less obscure, there will always be certain contracts that will never use smart contracts simply to avoid prying eyes.
While it seems unlikely that they are going to be replace traditional contracts in the near future, smart contracts can also be used with traditional contracts to update certain operating parameters much more quickly than physical documents can realistically travel. This means that both parties in a transaction would be about to act more confidently knowing that they can make the changes that the circumstances demand without sacrificing the binding nature inherent in a more structured contract.
This type of utilization will also be cheaper for both parties who are involved as there will be fewer intermediary players required to ensure that paper versions of digital transactions are delivered at half the pace as well. The binary nature of smart contracts means that they could even be used in extremely expensive scenarios that typically require the use of an unbiased escrow service as both parties will clearly know that the money will only be transferred when specific variables have been met.
Financial services: When it comes to the financial services industry then smart contracts can clearly be used when it comes to manage the workflow and approval process inherent in trade clearing or settlement generation scenarios. Transfers and trades that happen as part of a settle can also happen automatically as well. Furthermore, smart contracts can also be utilized when it comes to determining the amount of any coupon payment that need to be generate sure be after the related bonds expire.
When it comes to insurance claims, smart contracts can be set to automatically pay out to insureds once certain binary factors are met which would take the need for insurance adjusters out of the equation almost entirely, there is no need for personal opinion, only a strict adherence to the facts. Assuming the internet of things continues its slow consumption of everything not already connected to a wireless transmitter then your insurance company could set a smart contract that decreases or raises your insurance rates as certain triggers are detected or not depending on how good of a driver you are.”