Smart contract

Smart contract
3 min read
05 September 2022

While some companies are forming another binder for paper contracts, others are renting out cars and refuelling planes in a few clicks - using smart contracts. Not only is it trendy and technological, but it's also fast, secure and confidential.
A smart contract ("smart contract") is a computer program that monitors and enforces obligations. The parties write down the terms of the deal and the penalties for non-compliance, and digitally sign them. The smart contract determines whether everything has been fulfilled and decides whether to close the deal and issue the required goods (money, shares, real estate), impose fines or penalties on the parties, or close access to the assets.  
You can make a smart contract yourself (if you know how to program it) or contact a specialised company . Only an IT specialist will be able to "read" a smart contract because it is written in a programming language.
It is possible to prescribe all stages of the transaction or a separate part of it in a smart contract. Depending on this, it can be:
1. fully automated, with no paperwork;
2. partly automated, with a copy on paper (in which case it must be agreed in advance which has priority in case of discrepancies - the code or the text);
3. partly automated, predominantly on paper (e.g. if the smart contract only regulates settlements, and the dispute resolution procedure, assurances of circumstances, etc. are contained in the contract in natural language. Incidentally, this is the most popular model).
The programming language of a smart contract depends on the technology. Experts say: you can automate anything, but it will be expensive and pointless. Smart contracts make sense for typical, recurring transactions (deliveries, leases, tender security, letters of credit, guarantees, royalties) that are easy to track. If the information for such transactions is already digitised, or if the transaction is based on open data, it is even easier to design and execute a smart contract.
Smart contracts that interact with the internet of things have great potential. Using smart contracts for voting will eliminate any tampering and ensure maximum transparency in the process, and in lending, it will automatically block a debtor's account in case of late payment and prevent them from getting into debt. When making a will through a smart contract, a notary will not be needed.

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Mrblumn 13
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