Use-Cases of Smart Contracts You Must Know - 2023

Use-Cases of Smart Contracts You Must Know - 2023

With the rapid expansion of smart contract development, IT leaders and the top custom software development companies should be aware of the roles these contracts could be a part of the IT enterprise ecosystem.

Blockchain-based smart contracts have the possibility of streamlining specific business processes. A few companies or top custom software development companies are exploring possible applications, such as in the fields of healthcare and advertising. But smart contracts also come with disadvantages, like security and scalability problems. Therefore, the leaders need to weigh their advantages and drawbacks.

'Smart contract' defined.

"Smart contract" is a term used to describe a smart system "smart contract" refers to the concept of a smart contract, which is a self-executing software based upon logic based on if/then. For example vending machines are regular feature in our daily lives. They also offer a simple instance of a smart contract. For instance, you pay $2 and presses B4. It will distribute cookies from the box that is in the slot B4. If, for example the vending machine could get the necessary item it will be able to act.

Smart contracts are able to operated on a variety of designs, such as blockchain technology and distributed ledger technology that was developed by top software development firms. For blockchain, the application will be stored in a digital blockchain and executed when certain events cause an additional step. For example, an event can trigger a payment or service delivery. They are one of the commonly utilized blockchain applications, and for a large number of smart contracts the phrase "smart contract" refers to smart contracts within terms of Blockchain.

A smart contract that is based on blockchains can help in automating workflows, and then moving to the next stage whenever needed. When a smart contract is based on blockchain it is the input from an oracle that initiates the actions. The oracle acts as an bridge connecting that connects the blockchain and real-world events. It allows customers to enter and export data from real-world events and create smart contracts.

There are a variety of oracles designed by top software development firms. For instance, scanners as well as sensors function as hardware oracles. Sensors that detect RFID on food items transmits the information to an agreement, which is then used to pay the seller. Another instance is that an oracle in an IoT device is able to gather useful information that an artificial intelligence system could handle. The AI system utilizes the data to activate smart contract functions on its own.

Blockchain-based smart contracts do not require private keys, which is typically needed to secure blockchains within enterprises. The software which powers smart contracts handles their private keys. This implies that non-identifiable users are able to access the information. There is however an opportunity to make smart contracts more decentralized and accepting an encrypted private key.

Here are some of the real-world life of smart contract, and the downsides of using them in an enterprise blockchain project.

1. Improve a digital advertising campaign

Smart contracts may assist publishers and advertisers in building strong partnerships. Smart contracts can contain conditions that require a publisher to meet set goals. If an oracle proves that the publishers did what they were supposed to, the contract will trigger a payment. For instance, it could be a clause that states that a social media profile with a large number of followers should advertise a discount coupon. After the account has made 100 purchases that are legitimate using the coupon code, the owner of the account is paid. Additionally, smart contracts could prevent problems by preventing fraudulent tactics such as pixels being stuffed into ads or publishers exaggerating the number of impressions they receive from a particular advertisement by largest software development companies.

2. Make sure you provide the best customer experience.

Smart contracts can help build the possibility of a more solid B2C connection in real time. For example, a footwear company partnering with a music streaming service gives a free time subscription if the customer makes a playlist they listen to while running. Smart contracts send the consumer an offer for discounted footwear or suggest songs of the same tempo that can be added to their playlist. It can increase customer satisfaction by helping runners love music while tracking their progress.

3. Fill the void of entertainment consumption.

Blockchain technology introduced by largest software development companies could enhance how people interact with their favorite entertainment options. For example, non-fungible tokens often referred to as NFTs, are used to verify the ownership of digital assets. Smart contracts can simplify the purchasing, selling, and trading of NFTs. Additionally, there is a growing desire for smart contracts to compensate independent creators such as musicians, authors, and filmmakers. The automation eliminates the requirement for intermediaries to manage royalties.

4. Eliminate the intermediaries for financial transactions

Blockchain technology has attracted attention to the concept of decentralized financial transactions. It is usually related to peer-to-peer (P2P) cryptocurrency transactions such as bitcoin and Ethereum. Using digital currency with smart contracts could reduce the time and cost of paying for these transactions. Smart contracts also can be used to automatize the manual processes in banking traditionally carried out by financial institutions, for example, assessing the loan's eligibility, processing claims, and implementing compliance with regulatory requirements by top software development companies in the world.

5. Increase the quality of healthcare communication

Communication is essetinal for both the patient and the insurer. The storage of a patient's medical record on a blockchain can simplify the process of processing paperwork, improve compliance with regulatory requirements, and facilitate information sharing between healthcare providers. A patient, for instance, needs a particular medical procedure. An authorization request before the procedure triggers smart contracts by electronically checking insurance coverage before paying the medical facility overseeing the procedure.

6. Maximize the efficiency of human resources

There is a chance to automatize the HR manager's process with distributed ledger software developed by top software development companies in the world. For instance, an HR worker must verify his or her employment history and perform reference checks. Smart contracts could make it easier to onboard new employees by making the verification process. Blockchain could also help automate tasks like enforcing employees' contract terms and penalties and processing paychecks.

7. Enhance security for identity management and access management

IT professionals must safeguard the digital identities of users within their networks. Paperwork used to manually process identity requests isn't fast enough in an increasingly digitally dependent world. Constant threats such as data breaches demonstrate the need for other methods. Authenticating users using smart contracts could enhance or replace traditional identity management methods.

8. High-quality relationships in the insurance industry

Insurance companies and policyholders have numerous multifaceted interactions. A few obstacles that hinder an effective insurer-policyholder relationship include the complicated language of policies issued by insurers and fraudulent claims made by policyholders. Smart contracts may increase efficiency in submitting claims, an insurance company switching a policyholder, or collaborating among insurance firms. Insurance companies could detect fraudulent activities early using the smart contract's code.

9. Enhance the supply chain management

Some areas in Supply Chain Management could benefit greatly from using enterprise blockchain. Smart contracts can improve the traceability of items and other materials. For instance, blockchain-based software can track an item's origins when it travels between international supply chains and calculate the tariffs in real time. However, some companies are also looking into smart contracts based on blockchain. In these cases, blockchain could be a way to increase efficiency and reduce mistakes.

10. Efficient distribution of utilities

Blockchain technology is gaining popularity. Technology within the energy sector is increasing. It could, for instance, simplify the delivery of electricity from an energy firm to the consumer. 

Implementing smart contracts can simplify the energy trade by connecting smaller energy producers. Smart contracts can also help to verify renewable sources of energy. Blockchain's capacity to store and process transactions over time makes it a promising option for implementation.

1. Compliance

There are no government or international regulations regarding smart contracts and blockchain

technology. But more and more businesses are embracing blockchain initiatives, which implies

greater examination. Creating company-wide compliance guidelines can reduce loss due to the

threat of significant. These threats include cyber-attacks on blockchain networks cyber-attacks,

cryptojacking, and human incompetence.

2. Data Integrity

Automating data processing through smart contracts can benefit companies that depend on

multiple transactions. But, there is an issue of inaccurate data input. An unprofessional actor or a

user who is not properly trained or an individual who is oblivious to one step can result in inaccurate

information, incorrect or incomplete data, and yet cause the smart contract to be activated. So, it's

crucial to safeguard the data's integrity to avoid mistakes.

3. Hacks to logic

One of the advantages of blockchain technology developed by top software development company is the use of computational logic that allows data to be moved between nodes. However,

malicious actors find ways to attack this logic and take advantage of it to undermine compatibility

in the system. These types of attacks are typically seen in crypto. However, it doesn't mean that

contract software is invulnerable. A poorly coded, unsecure smart contract may expose a blockchain

project for an enterprise to danger.

4. Scalability

It's a challenge for Blockchain technology that is public to grow. Blockchains must be able to

handle a variety of transactions at once. This can lead to an increase in load on the nodes,

which requires electricity, computing power, and bandwidth. Shredding and using a proof-of-stake

algorithm offer the potential to reduce this disadvantage.

5. Security

The technology used to create smart contracts is improving as more top software development company incorporate these into their systems. But, security risks exist if the blockchain smart contract is not properly coded or maintained. However, establishing the framework for governance can aid an organization in staying in front of these threats.