Smart contracts are digital contracts integrated into the blockchain code. For example, let’s take the simplest operation – the process of buying and selling cryptocurrency between users. This transaction takes place under the requirements of anonymity and is not regulated by intermediary organizations that control its implementation. This model became possible thanks to smart contracts, which contain a detailed algorithm for conducting an operation between two users. This helps to exclude the possibility of fraud on both sides and conduct a transaction according to a specific algorithm of consecutive actions.
Smart contracts are part of the blockchain software code and operate directly within the network. They have the function of the usual paper contracts, only in the digital form. The conditions on the contract are not written with a pen on paper but with the use of mathematical algorithms and programming languages.
The conditions of the smart contract, as well as paper one, are subject to mandatory implementation. Only in this case, the transaction will be implemented, and users will receive the stipulated result. After the completion of the algorithm and the correct execution of the operation, smart contracts become part of the registry, getting into the blockchain network.
Different spheres that can benefit from smart contracts:
Finance. Smart contracts are a necessary element to ensure the functioning of decentralized projects (DeFi, DApps, etc.), as these are systems without the support of regulatory authorities. In this case, smart contracts are used to ensure that the stipulated agreements are followed in the correct algorithmic sequence.
Trading. Smart contracts can be applied in international trade or cross-border payments. You also won’t need any intermediaries.
Supply chain management. The smart contract system automates the supply chain and makes it more transparent. This will lead to the avoidance of fraud in the supply chain system.
Insurance. It is highly efficient to use smart contracts for the automation of claims in the insurance system. Also, smart contracts will make dispute resolution more trustworthy with the provision of the necessary proof.
Real Estate. The parties in this sphere can ensure their deal with a reliable and secure smart contract. The seller won’t need to worry about the buyer paying the value of the property as it will be automated.
Along with developing the smart contract, it is just as important to audit it to identify security risks. In fact, the AkuDreams NFT project has lost 12,000 ETH, which is equivalent to $34 million, that could have been easily prevented with a smart contract audit. CPI Tech team provides the service of smart contract audit to eliminate flaws and help you correct them. We conduct an in-depth analysis of your smart contract and provide a detailed report. Also, you will receive a certificate of smart contract audit from our team to warrant our work.
Do you want to upscale your business with smart contracts and stay at the top of your industry with digital transformations?