In the current scenario, every aspect of life has been advancing with innovative technologies like Blockchain. Smart Contracts are well known to the crypto enthusiast. let us discuss the Blockchain Smart Contracts adopted by the Businesses.

What Are Smart Contracts?

A computer scientist Nick Szabo talks about self-executing programs that are extremely relevant in a distributed ledger – showing an incredible coincidence to what the blockchain technology!
Smart contracts are self-executing of programs that are designed to get tentatively executed and are inherently immutable.

This means that once the conditions of the smart contract are laid out, it is almost impracticable to tamper with the functionality of the contract, giving it one of the most secure and reliable options for executing conditional transactions.

How Does a Smart Contract Work?

A smart contract is a self-executing code when it reaches a particular condition that is set on the smart contract code for higher security and for performing financial transactions.
Let us demonstrate the significance and performance of smart contracts with an example.

There are two parties involved in the smart contracts the Person A who is the owner of the property and Person B is a person who leases the property for a certain period.

Typically, there will be a platform that will take care to verify the identity of the person who would like to lease out the property and the authenticity of the property being listed out for leasing. They would also charge a fee for aiding the verification and guaranteeing the trust. Besides, they also aid the payment that needs to be made by B to A in event of the contract coming to fulfillment.

The smart contract automates the whole process without the influence of any third party and without bringing in the costs involved. Besides, it also eliminates the possibilities of inclination that come along with any human intrusion.

Using a smart contract, both A and B put some value in a selected and dedicated storage from where they will not be able to easily withdraw the money that they put. A puts the lease amount in the storage and B inputs the address and the code to access the property. Once the inputs are confirmed, A receives information that B has placed an amount, and B, in return, acquires access to the property details.

B can go and check out the property in the given address, and if it conforms to the details provided by A, B occupies the property and A received the payment. If the details do not match, then B gets his money back as it was not given to A in the first place. If B does not even visit the property, a certain amount is paid to A for the effort taken and B gets the balance amount refunded.

If the transaction has been executed successfully irrespective of the outcome, the details are stored in the blockchain building a robust and unerasable report for the transaction.

The same logic can be used to execute transactions between parties without the involvement of a mediator, irrespective of the complexity. Just like how every program has an algorithm, the smart contract should have the ‘mechanism’ figured out, so the entire process can be conditionally automated.


Benefits of Smart Contracts

Smart contracts facilitate direct dealings with customers and between customers. They eliminate the need for intermediaries facilitating better transparency and as a direct consequence, better relationships with customers. The removal of intermediaries also makes the entire process cost-efficient making the transaction fees almost close to, or at times, equal to 0.

Smart Contracts are built over the Robust Blockchain platform and it provides the advantages of Immutability, Transparency, and Decentralised.

Immutable is a feature in which no one can alter the data stored on the blocks. Each block is interconnected with the previous and successive blocks. No need to worry about the alteration of the contracts.

Transparency every change in the contracts is notified to all the parties involved in a smart contract. All the transactions are transparent in parties in smart contracts. No need of hiding the details and intrusion of other people.

Decentralization is an important feature, where the smart contracts are decentralized omitting third party intrusion like agents or lawyers for ensuring the legal procedures. No need to depend upon the third party.
The Smart Contracts are mainly used for the ICO and Tokens, where the ownership of the coins/tokens can be sold with the help of smart contracts for the investors in crowdfunding.

Developing a Smart Contract

The most leading blockchain used for generating smart contracts is Ethereum. Any smart contract development services company will go by the unsaid practice that Ethereum Smart contract development is more obvious compared to any other blockchain.
However, it cannot be denied that other blockchains help different smart contract applications.

There is much more usage of Smart contracts at various industries like Insurance, Banking, supply chain, Wills, crowdfunding, investments, etc. Each smart contract development company specializes in specific blockchain smart contracts. However, Osiz technologies being a predominant Blockchain Smart Contract Development Company have smart contract developers specialized in every possible blockchain.