Smart Contracts

What are smart contracts?

A smart contract is an agreement between two or more parties in the form of computer code. The contracts are stored on the blockchain and cannot be changed. Transactions that take place in a smart contract are processed by the blockchain, which means they can be sent automatically without the intervention of a third party. When you enter into an agreement with a smart contract, no confidential advisor is required. The transactions only take place if the conditions in the agreement are met.

Is this safe?

In the same way that the bitcoin network is secured through the blockchain, so too can smart contracts. being decentralized, they are near impossible to hack, and cannot be manipulated by a controlling authority.

What can they be used for?

In the first world, the idea of storing documents and deeds on the blockchain doesn't seem very magnificent. But there are some very interesting and potentially beneficial ways to use smart contracts to our advantage.

Insurances 

The French insurance company AXA provides flight insurance paid out when your flight is delayed by over 2 hours. The company trialed their insurance policies through the Ethereum blockchain (view the article here - https://www.axa.com/en/magazine/axa-goes-blockchain-with-fizzy). The smart contract they created was connected to flight times, and using an "if / then" condition, customers are automatically payed when a flight is sufficiently delayed. Not only is this less hassle for the customer, it makes sense for the insurance company to implement a more trustworthy, efficient method of payout through the blockchain. The company later discontinued these services (click here to view the article - https://uk.finance.yahoo.com/news/axa-drops-ethereum-based-flight-160027248.html) due to "lack of an appetite for blockchain-based consumer insurance policies". Though they continue to attempt to integrate blockchain to their services.

Healthcare

In healthcare, patient data can be recorded and secured within the blockchain. Cases of this already being implemented can be found live, such as the company Encrypgen, for example. Their application stores medical data on the blockchain, making the information widely available for cross-hospital transfer. In this way, patients are in control of their own data, and if researchers want to use patient data, they have to pay for it. The patient also has the choice whether they want their data to be for sale.

Government

The recent stunt pulled by Donald Trump in during the 2020 American presidential elections has shown that there is need for a more modern and trustworthy mechanism for voting. the argument against online voting has always been security - this point is nulled by using blockchain technology. Furthermore, this negates the need for the clunky polling station system, or alternatively posting your polling card, possibly leading to a higher turnout. 

Business management

Similar to AXA's "if / then" conditional smart contract for paying out insurance - businesses can utilise a similar type of contact for salaries. Say, on the 5th of every month, payout £1500 to employees. This way, there are no discrepancies in pay, money arrives on time, and the company saves time and money using an automatic system.