Smart contracts serve the same purpose regular ones do. They set and regulate the conditions of an agreement in digital form. They possess several important qualities that differ from what a regular contract can guarantee.
Smart contracts are autonomous, which means they aren’t subject to third-party interference. Their secure structure allows the processing of data in a secure way. They are fast and cost-effective, and, when properly written and audited, they can be error-free as well. But arguably the most relevant aspect is that a smart contract eliminates the need to trust each participant.
A smart contract is a program stored on the blockchain that runs when the sides meet the set conditions. In this article, we review the top 10 smart contracts use cases.
There is a reason smart contracts are used for exchanging cryptocurrencies and trading. In fact, dApps or decentralized applications, are used to conduct all types of financial operations similar to the regular offline financial system. From trading currencies to lending and borrowing money. Smart contracts provide the necessary services. DeFi projects simplify financial relationships, allowing anyone to enter the world of trading and earning interest.
Paying for Services
Aside from regular transactions, dApps allow completing payments. Users can pay for services the same way they can purchase items or exchange finances. Depending on the specifics of the contract, various conditions can be set, while the exchange still happens automatically. Binance Smart Chain provides multiple examples of smart contracts being used for ordering services.
NFTs in Gaming
Lately, NFTs have become a crucial and one of the most popular aspects of the decentralized market. They represent digital ownership of certain items, meaning unique attributes and objects for a character or player. Powered by smart contracts, they are considered to be both convenient and easier to comprehend for users new to blockchain. Aside from being a foundation for non-fungible tokens, smart contracts provide a secure way to buy and sell unique items with a guarantee of a successful transaction. Items can be not just purchased or sold but moved to other games.
Smart contracts are contracts, after all. And aside from simply repeating the functionality of binding agreements, they offer potential to the legal industry. The main feature, in this case, is the strict structure that demands fulfilling obligations. Some believe that eventually, smart contracts might even eliminate the need for involving actual lawyers.
Tokenization is yet another practice that has successfully made its way into mainstream markets. What are smart contracts used for in real estate? There have already been examples of tokenizing property and developing special platforms like RealT and SolidBlock that combine real estate with blockchain technologies. According to the proponents of this technology, smart contract implementation can reduce fees that are usually applied to any real estate transaction.
Decentralized autonomous organizations or DAOs function similarly to corporations with one fundamental difference – they are member-owned and don’t have a centralized leadership. Every aspect of business relations is detailed with the help of smart contracts, which is once again where their trustless structure comes in handy. Since 2017 businesses are allowed to be incorporated and managed via blockchain.
Smart contracts can be a convenient solution for automating operations and providing transparency for various government services. While this is not a widespread practice just yet, it can potentially improve efficiency in various procedures. Real-world examples of smart contracts in government services may include speedy tax collection, vaccine tracking, and other relevant issues.
Creating Public and Private Networks
Since blockchain can be used for public or private access, it allows companies to create networks where the users, be it clients or partners, would provide data through the ledger, use the network and participate in the processes. While public networks provide universal access, private can limit it while data remains secure. Naturally, they would rely on smart contracts to provide functionality.
Proof of Authenticity
One of the ways to implement smart contracts in commerce is using blockchain for proof of authenticity for items. When famous brands develop clothing items or collectibles, blockchains are sometimes used for tracking them. When the item gets sold or switches ownership, it’s always possible to track it. This can simplify counterfeit detection.
Research and Development
Smart contracts and blockchain technology may find arguably the most important application in research. Storing and accessing data while exchanging information with partners or other parties can be performed with ease using smart contracts. One such example is the development and advancement of the Internet of Things. Security and transparency needs can be met by implementing smart contracts to the IoT devices.
With every new step in tech, smart contracts find more and more applications. These are only a few examples of how this technology can improve most aspects of our everyday life. Of course, smart contracts have to function properly, which is why it’s vital to subject them to audits prior to putting them to use. 0xGuard is here to address any security needs related to smart contracts.