One of the most important features of blockchain is that the data it holds is not stored in a centralized location. This eliminates the need for trusted third parties and translates to lower fees and faster transaction times for parties involved.
A decentralized future is important and smart contracts have the potential to significantly alter long-standing aspects of society.
According to World Bank’s 2021 edition of financial inclusion database survey of over 125,000 adults in 123 economies, usage and access to formal and informal financial services and digital payments has reached 76 percent of the global population, 71 percent of which are people in developing countries. Mobile money is becoming an important part of financial inclusion in Sub-Saharan Africa through mobile payments, saving, and borrowing.
With smart contracts, transactions aren’t just limited to money and can include shares in stocks, property and intellectual property rights.
Smart contracts lay out the rules and the penalties associated with a particular agreement and automatically enforce the obligations attached to it. Depending on the model, which can either be contractual or non-contractual, the outcomes for which a smart contract is encoded to perform cannot typically be stopped unless a condition has not been met.
Smart contracts are:
Secured & Interruption Free: As smart contracts run on networks with immutable data, the data generated by them cannot be changed or altered in any way. Once executed, they cannot be stopped or interrupted.
Fast Performing & Cost-effective: Autonomous smart contracts only need to match the term of the contract before being executed. Smart contracts make transactions more cost-effective with the removal of intermediaries.
Accurate and Error-Free: Properly coded smart contracts execute error-free.
To summarize, smart contracts give people a level of autonomy, security, speed and ease of use, cost-savings, immutability, accuracy, reliability, and trust that is essential in a decentralized future. One that will span areas such as digital identity and financial data recording, trade finance, derivatives and securities, mortgages and land title recording, supply chain, insurance and clinical trials.
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