Learn about smart contracts and how are we using them to drive industry into the future.
I’d wager that if we played a word association game the word “blockchain” would be associated with “smart contracts” 7 out of 10 times. As cryptocurrencies and blockchain technologies have entered the mainstream if you were to ask people “what is a smart contract and why is it useful?” the answers might come back slightly vague and perhaps littered with buzzwords. So, what exactly is a smart contract? Why they are useful? … and, how are we using them to drive industry into the future? The next time you’re huddled around your virtual water cooler you too can sound like you spent your lunch with Vitalik Buterin (founder of Etherium) learning about how smart contracts will change multi-party work, and the world.
We all know what contracts are. They're the written agreements that detail an offer, acceptance of terms and conditions, and consequences if one or both parties don't follow through with their obligations…etc etc etc. Now imagine that same contract but codified in 1s and 0s. Boom it’s digital, you have a smart contract.
This new form of digital agreement can be programmed to automatically execute only when certain preset conditions are met using ‘if then else’ conditions, meaning theoretically there is no need for lawyers, banks or other intermediaries to enforce it, just the cold-hearted lines of code that don’t care about feelings.
Now what is particularly unique about smart contracts is that the geniuses that created them have written them into the blockchain. This gives them two distinct characteristics. Firstly, the contract is 100% immutable meaning people can’t change it unless they create a new contract. Secondly, it is distributed meaning that the outcome of the contract is verified by all parties.
So, if you’re a bad actor, or conduct dodgy business or really love cumbersome manual workflows, I’ve got some bad news for you; smart contracts are going to make your life a whole lot harder, for the rest of us our lives just got easier.
I’ll cut to the chase, the benefits of smart contracts can be summarised by the following:
Speed and efficiency - when a contract’s conditions are met it executes immediately and because smart contracts are digital and automated, there is no paperwork to process or time spent reconciling errors that John from finance created because he forgot to input a zero on his excel spreadsheet.
Trust and transparency – There is no need to question whether information has been altered for personal benefit because encrypted records of transactions are shared across all parties.
Security – Contracts exist on the blockchain meaning they become very hard to tamper or hack.
Cost savings – Smart contracts remove the need for 3rd parties to manage contracts, meaning your hard-earned cash doesn’t need to be wasted on expensive fees and time delays.
Really it just quicker, safer and cheaper than manual, paper-based or ‘Microsoft suite’ based processes and contracts.
Smart contracts are flexible. They can be applied to a broad range of applications and services such as digital identity management, decentralized finance (DEFI), insurance, the list goes on.
At Rise we’re all about leveraging these technologies to optimize work, and in particular work that is completed between multiple parties.
We use blockchain to enable multi-party workflows, providing a shared experience and common source of truth. It creates a transparent and immutable record of the interactions between parties in an end-to-end business process. A smart contract is created for every job. And every step in that job is written to that smart contract as an event, an immutable piece of information in that contract.
I’ll give you an example, you own a ship and you want to order fuel and you want a record of when and where you bought fuel and who supplied it you. Traditionally, this process is completed by separate siloed groups of individuals in their respective companies which creates a lack of visibility and transparency across the job.
Now, using smart contracts and blockchain this transaction is super simple. We can follow the bouncing ball from ordering fuel, accepting the order, to supplying the fuel, to paying for the fuel, all in a single workflow, in a single digital environment, capturing who did what and when, all on a completely immutable record.
Simply, we use these technologies to manage work, enable automation, capture events and analyse relationships between work.
And what we find most exciting about it all is we’re building a platform to go from ‘us’ to ‘you’ through no-code workflow configuration. Enabling what we call ‘ecosystem orchestration’ and empowering people from both technical and non-technical backgrounds to build, configure and deploy workflows anytime, anywhere.
Right, now you know what a smart contract is, why it’s useful and how we use them, let’s summarize the answers to the original questions so your chat at the virtual water cooler is short, sharp and concise.
What is a smart contract? It’s a digital contract built on top of blockchain technology.
Why is it useful? It’s quicker, safer and more efficient than traditional static contracts.
How do we use them? To manage work, enable automation, capture events and analyse relationships between work.
And most importantly, what does this mean for you, the reader? Well, smart contracts provide the technological foundation for which you can create your own blockchain based solutions to address whatever business problem you have using our Ecosystem Orchestration Platform – DIANA.
Really it means you can be flexible, agile and creative in an increasingly competitive business environment, giving you an edge over your competition.