Have you ever signed a lease, made a will, bought a house or downloaded an app on your phone? If yes, you will know that contracts are a ubiquitous necessity of modern life. Contracts set the legal terms and conditions in which two or more parties transfer ownership, money and goods.
The people who answered yes to the above question will have also come across one of the unfortunate aspects of the signing and execution of contracts: they can be complicated and long. Many online contracts are longer than famous works of literature, yet seldom as enthralling. And there are often middlemen (and their fees) involved in enforcing or carrying out the terms within them.
What if contracts could be quicker, cheaper, trustworthy and self-executing, not needing anyone to oversee the process? That’s the promise of the smart contract, an automated contract that plays out via the irrefutable ledger of the blockchain. When pre-determined events are triggered, the contract self-executes based on the conditions that were agreed to and written into the contract’s programming.
As the below infographic by BlockchainHub shows, this could lead to relatively easy, safe and convenient transfers of value, such as second hand cars, and eliminate associated fraudulent activity. With the removal of the potential subjectivity of third parties, the process costs less, involves only the people it needs to and plays out exactly as the contract was written.
The implications of this technology could be immense, with everything from insurance claims, bank transfers, real estate and government finding that a lot of the red tape taking up the workload of employees is suddenly eliminated.
Imagine what could be done with all that extra time? Smart.