Smart contracts are essentially just pieces of code that execute a function when they meet the requirements outlined in the code. Smart contracts were created way before the blockchain ever existed but their power is only starting to be leveraged in recent years.
With time more developers are finding new ways to use smart contracts for a variety of applications, in a variety of creative ways, and in any industry you could imagine.
The possibilities are truly endless and that is why we have curated a list of our favorites and what we consider to be the best use cases of smart contracts:
1. Store Inventory Management
One of the biggest advantages of a decentralized network and the blockchain is that everyone is seeing the same information at the same time. This does not mean everyone in the same area is seeing it but everyone everywhere is.
This emphasis is important because it can provide a good basis for an inventory system especially as far as bigger chains are concerned that have multiple stores in a single city.
By being connected with the blockchain on a decentralized network, companies can use smart contracts that keep track of their inventory in such a way that online systems can be synchronized in real-time.
This can be extremely beneficial in many ways however, it is the most useful when it comes to new product launches as the corporate headquarters do not have to wait till the end of the day to get a manual count to tell them how a product performed.
Additionally, smart contracts can trigger notifications when needed to reorder items and other useful information for store managers and stockroom employees.
2. Ecommerce Payments
Smart contracts are also extremely beneficial for online e-commerce payments. As smart contracts are considered immensely secure, they can be used by stores to process online payments easily.
Although security is a great selling point when it comes to using smart contracts for payments, there is one other reason why companies are flocking to incorporate this technology into their business.
When processing payments, payment gateway providers take close to 3-5% of each sales transaction. This is on top of the fees that card companies already charge to allow customers to use their credit cards which is also in the same range from 3-5% per transaction.
By using a smart contract on the blockchain, companies can cut out these middlemen costs and save this fee on every single transaction.
This can result in a massive change in the revenue of the overall company which is what makes it worthwhile to spend millions of dollars setting up smart contracts for the company in the long run.
3. Crowdsourcing Capabilities
When you combine an extremely secure payment system with a decentralized network, you are looking at a platform that is perfect for crowdsourcing of any kind such as crowdfunding campaigns or for voting in elections.
In a political environment that is full of noise about voter fraud and result manipulation, smart contracts can prove to be a great solution against any kind of error in counting votes.
Since an electronic vote counting system has been long overdue, this could be the perfect answer.
This can make smart contracts look very attractive and might even help with some legislative limitations around the same as smart contracts are not regulated by the government at the moment.
As far as crowdsourcing of other kinds is concerned, smart contracts are already being used for crowdfunding platforms that automatically trigger when someone decides to support a cause or fund an auction.
4. Medical Recordkeeping
One of the more helpful uses of smart contracts is for medical recordkeeping. Of all the advancements in the medical field alone, you would think that their recordkeeping game would be pretty high-tech.
However, hospital systems hardly have enough budget to implement some advanced security measures and even when they do this, it is rather easy to hack these systems and gain access to confidential patient information.
The moment this confidential patient information ends up in the wrong hands, you can expect large legal fees, bad publicity, and some other not-so-great circumstances.
This is why medical recordkeeping is a great way to use smart contracts as they are considered practically immutable and can only be accessed by those who have the key.
This form of digitization can allow medical facilities to maintain the patient confidentiality and record preservation for a smaller price.
5. Insurance Payments
Smart contract automation has entered the world of insurance as well which is a sigh of relief for many people as they try to claim their benefits without having to deal with too many hassles.
By setting up automatic payments through smart contracts, insurance agencies can dramatically increase the speed at which they give out payments and even clear their list of claims to go through.
This can also decrease the amount of human error when it comes to approving a claim and issuing a payment. As smart contracts require a set script to be followed in order to run, the chances to give out a wrong payment are lowered dramatically.
This can help the insurance agency as well as the consumers as both will have lowered costs. Automations will lower costs for agencies which means they can charge lower premiums that are currently only increasing year after year and pass on the benefit to their clients.
6. Protecting Intellectual Property
To add to the list of creative uses of smart contracts, protecting intellectual property definitely needs a special mention. Smart contracts are perfect for this purpose because of their ledger abilities.
Many companies are using smart contracts to keep track of the ideas that are in the product cycle waiting to become a product. By adding all this product-related information to a smart contract, the company can track every single date and the real-time progress made on an innovation.
This detailed information log is a key advantage of using a smart contract as it can be presented as a piece of evidence admissible in court in an intellectual property trial or a patent dispute.
7. Standard International Currency
If you are following the news then you are aware of some speculation and controversy about the standard use of the US dollar as the trading currency between countries all over the world.
Turbulent relationships between countries are highlighting the need for an international standard currency that no single country controls and experts suggest that a cryptocurrency is the way to go.
Cryptocurrency as a solution for this issue may seem far-fetched for many, but in reality, it makes perfect sense when you think about it.
Finding an existing country’s currency that everyone agrees on is equally as far-fetched, especially given the sheer number of conflicts between bigger countries that may be a forerunner in this race.
This is where smart contracts come into play yet again. They can simplify the trade process between countries quite a bit by creating a secure payment channel without having to pay any conversion fees on currencies.
While international trade is just one aspect of this effort, it is clear to see how pivotal smart contracts can be if cryptocurrencies were accepted as a standard method of payment.
This endless potential is exactly why so many developers are gravitating toward smart contracts whether it be through their existing coding background or by enrolling in a boot camp such as RareSkills Smart Contract Developer bootcamp.
Through these boot camps, developers can create any application they can imagine for the decentralized network and use smart contracts to automate the processes these applications are designed to carry out.
Conclusion
While many believe that cryptocurrencies, the blockchain, decentralized applications, and smart contracts are all fads, it is important to note their growing need in the real world.
From government applications to private companies and international organizations, the list of beneficiaries of the best use cases of smart contracts is ever-growing.
Not only that, experts claim that this is just the tip of the iceberg.
According to industry leaders at the forefront of these developments, blockchain technology is right now where the internet was when it first started out. That gives us some major insight into the hope and potential of a world that operates on the blockchain similar to how it operates on the internet today.
As many were wary of the disadvantages of the internet when it first started out, you can be assured the same will be the case for blockchains and smart contracts.
Where once people were scared of making online payments, many now handle all their banking efforts through the internet.
Cryptocurrency, blockchain, and smart contract creators are all riding on this hope that this will boom the same way the internet did in the coming years. It is time to see where these efforts go from here or if this is in fact the end for the blockchain as many claim.