Industries that need Smart Contracts

Two decades after the idea of Smart Contracts was developed for the first time (by Nick Szabo in the mid-1990s), this amazing piece of technology has reached a turning point when it became very clear for everyone that it is going to disrupt the way business is conducted in many industries. And this was made possible by a simple but very effective technology – the blockchain.

But why do we need Smart Contracts?

Blockchain may be known nowadays mainly due to its role as the driver behind the cryptocurrencies, but the actual killer app of this huge operating system is represented by the Smart Contracts. As our world becomes increasingly digital and distributed, companies are forced to re-imagine business processes in order to ensure the necessary level of security, trust and accountability.

Blockchain is in our opinion the only technology able to provide all these. That’s why we see many industries leaping into the blockchain in the next years. Of course, some industries are more exposed than others to this revolution, and companies in these industries are already forced to start adopting blockchain and Smart Contracts if they don’t want to be left behind and eventually to disappear.

Smart Contracts in the finance sector

One of the first industries to feel the impact of the blockchain technology was the finance sector, whose monopoly on circulating the money was threatened by the cryptocurrencies. But the financial industry can also benefit from this new technology, registering and saving bank transfer notes and trading in general being a major field for potential deployment of blockchain applications.

The biggest hurdle for the financial system is the heavy regulation, which transforms the financial operations in one of the most time consuming activities. In many cases, documents are still transmitted in physical shipment, decreasing the overall speed and making them a target for potential fraud and misusage. Using Smart Contracts in this field can reduce the overall complex overhead, while significantly increasing the transaction speed by digitalizing the physical shipment and enbaling instant document issuance. As a result of the more efficient workflow provided by Smart Contracts, combined with their overall safety, they could prevent potential document fraud at its earliest roots.

As an example use case within the financial sector, we don’t have to look very far. A pilot project launched by the French insurance giant AXA last autumn is a great illustration of the type of solution that becomes possible. It consists of a flight-delay insurance product that stores and processes payouts via Smart Contracts based on Ethereum’s public blockchain. The application is linked to global air traffic databases, which means that as soon as a delay of over two hours is registered on the ledger, compensation is automatically triggered.

Smart Contracts in the automotive industry

Leaping now from insurance to the automotive industry, we can see further applications of blockchain-backed Smart Contracts. Especially in the field of the so much-awaited self driving cars. A certain phenomenon coming with the rise of more and more driverless cars filling our streets is a transitional phase of more complex accident scenarios. Here, Smart Contracts will be able to manage an almost infinite amount of variables that factor in after an accident has taken place, making it much easier to determine who was at fault. And coming back to insurance companies, they would be able to potentially integrate this information to update, track and monitor policies, anywhere at any time.

Smart Contracts in the healthcare sector

In the healthcare sector, Smart Contracts can help by keeping the safety and privacy of medical records, encoding and saving them on the blockchain. The private keys now used mainly by cryptocurrency holders to access their digital wallets can be used by doctors to access the private medical files of their patients, updating them in real time and keeping them secure.

Smart Contracts in the supply chain

As another example, supply chains in times of advanced computational support have become increasingly complex to manage. And smart contracts could immensely reduce the complex multi-contributor supply chain system and delivery of goods. Due to its nature, a Smart Contract could keep track of goods in a unified system, a unified data set and is able to trigger several events connected to a chain-related event like item movement, item production and even warnings and calculations of delivery assurances. Furthermore, fraud-reducing validation and verification again could be applied on the go.

Smart Contracts in real estate and construction

You might find it surprisingly to see that the use of Smart Contracts is not limited to the services sector, but they can also significantly transform more down to earth industries, like real estate and constructions. In fact, the real estate industry is poised to be completely revolutionized in many ways, from the construction aspect to the investing sector.

For example, RFID chips allow the construction site to be monitored in real time by all involved parties. As regards the investment side, Smart Contracts will make investing easy, profitable and most importantly, transparent, as virtually anyone can invest into real estate properties anywhere in the world with no minimum entry threshold.

In fact, the application of Smart Contracts into real-world scenarios and fields doesn’t include any boundaries. Due to their generic nature and code-wise definition of purpose, they could be applied to any field of logic and structure, however some fields do seem to hold a bigger potential in applying and benefiting from Smart Contracts execution.

And we are here to help your business set itself on the right track.