Preface – This post is part of the Blockchain Basics series.
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Since the blockchain was introduced, the common question was “How Blockchain will become a revolution?”. With the introduction of Ethereum in form of Solidity platform, the concept of Smart Contracts was developed. As it sounds they are the contracts handled in a smart way. It was introduced to automate the hectic contract signing process between two parties. In this article we will explore more about it.
What are Smart Contracts
A smart contract is a self-executing contract, which is automatically triggered once a condition is successfully met. This contract can be partially or fully executed with or without human interaction.
Following are the some of the advantages:
- They are accurate, transparent and efficient as compared to paper contracts
- They are are more secure
- Better Storage and Backup
- With blockchain it brings trust between two parties
This concept can be easily understood by the example of Non-Disclosure Agreement signed by an employee whenever he/she joins an organization. The first step will be to automatically send each new joiner an agreement that can be digitally signed, once signed a digital password will be generated automatically and the credentials for official access can be sent to the new employee. These three steps don’t need any human interaction, and these can be easily achieved using smart contracts.
This was a very simple explanation to replace human based operation with smart contracts. Once these are implemented in government offices for legal documentation, may help to curb corruption. They can even serve wider range of business problems and some of these use cases you can find in the given white paper: “Smart Contracts: 12 Use Cases for Business & Beyond”.