Smart Contracts are programs that are on a blockchain and run when a set condition is achieved. Smart Contracts helps us to automate agreement execution such that all the participants can have that trust and be certain of the outcome without having to go through third parties and no time wastage or being taken in loops to get transaction results. Smart Contracts Helps also automate a Work Flow such that when one level of a task is completed it moves to the next level automatically. Smart Contracts self executes and the seller-buyer agreement is automatically inscribed into the line of code When Smart Contracts is used it makes the agreement or transaction traceable, and transparent and no reversal can be done.
Description About smart contracts work
Smart Contracts apply the business logic statements like if/when..then/else, these statements are embedded into a code on a blockchain or other distributed ledger. Connected computers in the network when they execute an action when the set conditions have been met and verified Examples of actions include releasing Money to the right person, sending a notification, giving out a ticket, and many others, once the executed action is completed the blockchain gets updated with the information hence meaning the transaction cannot be altered, also the people with the right to view the transaction can then be able to View those updated results.
Business teams collaborate with developers to determine how transactions meet the criteria and how to be represented on the blockchain to ensure that the business logic is fully met, the participants are satisfied and to have clear ways of solving disputes in a situation it occurs. Once the Business teams and developers agree and the Smart Contract has been vetted, the contract is deployed on a distributed ledger or an existing blockchain. Smart Contracts when deployed they have been configured to listen to events updates from an oracle a cryptographically secure streaming data source. Smart contracts will always execute once in getting the events from oracles.
Benefits of smart contracts
Speed, efficiency, and accuracy
with smart contracts once a condition is met it gets executed immediately since they are digital and automated. There is no paperwork involved hence minimal errors are encountered saving time correcting errors.
Transparency and Trust
Trust is high since there is no third party involved in the execution of the smart contract. For Transparency, all encrypted records of any transaction done are always shared among participants hence one can easily follow up for self and reconcile.
Changing a single record by hackers is impossible as the record is interconnected with previous records in a distributed ledger meaning for them to succeed they need to make changes to the entire chain, beside that also all the records through the smart contracts are always encrypted
Smart Contracts do not need intermediaries for any transaction to be conducted hence saving time and eliminating any other fee that could have been added when those parties were involved
Smart Contracts Application Areas
Here are some of the examples of organizations that have embraced the use of Smart Contracts to enhance their solution delivery and have access to the benefits we discussed above
Increasing trust and transparency in retailer-supplier
Real-time communication and transparency in supply chain transactions, it has enhanced strong relationships as well as transparency for Home Depot which uses smart contracts on a blockchain. They are able to resolve any disputes quickly and create more time for them to focus on innovation and improved service delivery. an example of
efficacy medications Safeguarding
Smart Contracts have been embraced by Pharma Portal which is a blockchain-based platform that tracks temperature-controlled pharmaceuticals through the supply chain to provide accurate, trusted, and reliable data between multiple participants. Sonoco and IBM are using Smart contracts Powered by IBM Blockchain Transparent Supply to reduce issues in the transport of life-saving medications by ensuring transparency in the supply chain is top-notch.
Fast and Efficient Cross-Border trade efficiency
the Smart Contracts trade finance network we.trade convened by IBM Blockchain is helping businesses create trust among traders in the global space.we.trade has simple trading options and standardized rules that assist traders to reduce the risk and trust issues hence expanding trade opportunities and making the process easy for banks and companies who are using the we.trade platform.