After a string of blog posts discussing blockchains, smart contracts, and their use cases, it is time to bring the series to a close with a look at the benefits of using smart contracts over traditional contracts.
Benefits of Smart Contracts
- Speed and real-time updates – Smart contracts solve the problem of slow speed inherent in manual processes. It also provides enhanced visibility through real-time updates
- Accuracy – Manually constructed contracts are error-prone while smart contracts boost the accuracy by taking the manual element out of the equation.
- Lower execution risk – The risks of manipulation, nonperformance, or errors are virtually eliminated since the decentralized process of execution is managed automatically by the network rather than an individual party.
- Fewer intermediaries – “Trust” services such as escrow become a thing of the past as smart contracts can reduce or eliminate all reliance on third-party intermediaries between counterparties.
- Lower cost – Like many other systems, smart contract reduce cost as they require less human intervention
Smart contracts are still in the nascent stage and things are understandably in flux. Even though the promise for a better future is an alluring one, business and technology leaders who want to stay current on the implications of smart contracts should track both technology and business developments surrounding smart contracts.
Implementing smart contracts on a blockchain will require significant integration work, and it will be important to understand the new protocols and considerations when evaluating these applications for the enterprise.