Understanding Smart Contracts: How They Can Benefit You

Author : Marco Sgalbazzini
September 15, 2022

Understanding Smart Contracts: How They Can Benefit You

As the name suggests, smart contracts are nothing but an upgraded and more advanced version of traditional formal agreements between parties. The smart contracts are basically stored on a Bitcoin’s high valuation and results to save time and eliminate the need for a third party which often turns out to be problematic.

These agreements are drafted exactly like traditional methods but are coded. That is why coders and not legal professionals develop these agreements.

Smart Contracts: What They Are And How They Can Benefit You

There are a variety of benefits that one may derive from these agreements but today we shall discuss the top 5 benefits of the same to give you a better understanding of such agreements.

  • Transparency:

Immutability of data is ensured as they are stored on blockchains. The Bitcoin smart contracts are extremely transparent which makes them more popular. They are visible to all the parties which gives them easy access to the agreement from anywhere in the world at any time. The data and words in them cannot be manipulated or altered without the permission or knowledge of all the parties involved.

  • Low cost:

As explained above, the elimination of third parties contributes to cost reduction in a huge way. There are a lot of expenses made in drafting a traditional agreement as it requires a lot of offline work. The various fees which were earlier paid to intermediaries are now eliminated which eventually helps the one getting it drafted save a lot of money.

  • Quicker:

Again, the absence of intermediaries plays a major role in reducing the time which is needed for them to be drafted. Smart contracts or anything that’s called smart in this digitalised world is supposed to save time and this is exactly what smart contracts do.

  • Secure and efficient:

We are all aware of the fact that bitcoin transactions are highly secure as they are encrypted. This means that anything and everything stored in this space is secured eventually. Each transaction is recorded in an open-sourced ledger so your data is saved from hackers as well.

  • Reduces legal barriers:

You may have to undergo a hectic legal procedure in the case of a traditional agreement but the case is exactly the opposite when it comes to digital agreements. The lack of third-party involvement of legal councillors and intense paperwork can be easily avoided using these contracts.

Uses of Smart Contracts- Points To Note

Smart contracts are definitely the future of agreements between two or more parties. They are highly secure and that is why they can be used for the political voting system in the coming future as well. It can also be used effectively in the healthcare system as data stored here is highly secure and keeps the private information between a patient and the doctor secured which protects their interests. All the receipts can be directly shared with the insurance companies which will eliminate errors and speed up the claim process.

The smart contracts can also be used in supply chain management as this sector requires a lot of data to be stored and some of it is extremely sensitive for the company to be leaked. This is the prime reason why they can use smart contracts between them and their clients, consumers or employees to safeguard their interests.

With all the advantages, there are some drawbacks to it as well which include the possibility of loopholes as it is a relatively newer concept. Bringing about a change in the contract process is also not something which can be done easily. There are various software available in the market as well that are already providing assistance and services related to this process. You can easily sign up there to get more information or get a contract made for yourself.

Conclusion

So, these were some points you needed to know about Bitcoin smart contracts. With all the advantages, disadvantages and use causes analyzed we can come to a conclusion that they do hold an important place in the future ahead and still has room for improvement but it is definitely a viable option to choose because of the many benefits that it has to offer.