10 February 2022
Blockchain technology is sparking an evolution in commerce, but much of its potential remains unrealized. This is mainly because companies still don’t know how to leverage the technology to its full potential. Smart contract solutions can help you create and enforce transparent, secure, and trustworthy contracts, saving you time and money and making your business more efficient and competitive. You can use smart contracts to perform business transactions safely under agreed terms and without intermediaries.
Smart contracts are the future of contract management. This article is a transparent and informative introduction to smart contract solutions, how to use them, what they can do for your business, and how NextHash makes it easy for you to use smart contracts.
Blockchain technology is set to change the world. This isn't just a statement. It's a fact, evidenced by how many businesses are already using it and how many more are integrating it into their processes.
And with blockchain technology now moving beyond its cryptocurrency roots, businesses are realizing that there are many uses for blockchain, including smart contracts. But what are these, and what do they have to offer?
The term “smart contract” was coined by computer scientist Nick Szabo in 1994 to describe a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.
Nowadays, smart contracts are agreements that are automatically enforced by code based on blockchain technology. This means the code enforces the terms agreed upon by both parties. The code is also used to prevent either party from tampering with the terms of the agreement. Smart contracts have no room for ambiguity or error, making them a more reliable way of carrying out business than traditional contracts. Smart contract solutions can be used to exchange anything of value, such as money, shares, or property. The contract is designed to execute itself automatically once the terms and conditions are met.
For example, if you were to purchase a house via a traditional contract, you would need to involve your lawyer to ensure that all the paperwork between you and your real estate agent is completed correctly. This kind of transaction requires a lot of trust between the parties involved.
When smart contract solutions are used, this becomes less of an issue because everything is carried out in code, so you don’t have to deal with as many people you may not necessarily trust. The only thing needed is for both parties to agree on the terms of the contract before signing.
Smart contract solutions can help your business in a variety of ways. Let's analyse a few of them:
A smart contract is a unique code that facilitates, verifies, and implements the agreement terms between two parties. This makes them safer and more secure than traditional contracts. Also, smart contracts are more transparent since transactions take place on an open blockchain network. Every user can see what's going on at all times.
Businesses usually deal with huge amounts of paperwork, especially when it comes to contracts. The introduction of smart contracts has solved this problem by creating digitalized versions of these contracts, which customers can sign electronically. As a result, businesses can avoid spending money on paper and reduce their paperwork significantly.
Smart contracts are also helpful in automating several business processes such as making payments, creating backups, and processing refunds that would otherwise consume time doing manually. This automation will allow employees to focus on more productive tasks.
Another benefit of using smart contracts is that they reduce the need for a middleman. Because contracts are executed by code, there is no need for a third party to enforce the agreement. This helps reduce costs and also removes human error from the equation.
The most common smart contract chains include Bitcoin, Ethereum, and EOS. These are all public blockchains that many users use to run smart contracts.
Bitcoin was the first public blockchain to be used for smart contracts. Since then, the Ethereum and EOS blockchains have been developed, which have been able to support even more advanced smart contracts and have attracted large numbers of users.
Let's take a deeper look at the most used smart contract chains today:
One of the most used smart contract chains in the world today is Binance Smart Chain (BSC). This blockchain network was created by Binance, an international cryptocurrency exchange founded in China but now headquartered in Malta. BSC runs parallel to Ethereum and allows users to process transactions at a higher speed and lower cost.
Binance Smart Chain uses Proof-of-Staked Authority (PoSA) consensus mechanism, similar to Proof-of-Stake (PoS). The main difference between PoSA and PoS is that users don't need to stake their own tokens. Instead, they can delegate their tokens to validators or staking pools so they can earn rewards for participating in block production and transaction validation.
EOS is a smart contract platform designed to make it easier for businesses to build high-performance decentralized applications. EOS uses a delegated proof-of-stake consensus algorithm and aims to be highly scalable.
Ethereum’s EVM (Ethereum Virtual Machine) is a Turing-complete system, meaning any program or script can be run on Ethereum as long as there are enough resources available. Combined with its high scalability, this makes Ethereum one of the most popular smart contract platforms.
Smart contracts are an excellent opportunity for businesses to take advantage of the speed, efficiency, and security offered by blockchain technology.
NextHash Labs offers custom-made turnkey solutions for any company that wants to implement blockchain technology into its operations. NextHash helps you complement and improve your business' efficiency and security by implementing blockchain technology, including developing custom smart contract solutions for your business. Our blockchain experts work with you to understand your business needs and create relevant smart contract solutions to help your business thrive.