Smart contracts have been tied to many financial solutions in many industries. Its relevance to the business and enterprise’s growth is easy since it can effectively automate the transactions between the parties. More significantly, all is done with less to zero intermediaries. Find out more about the defi smart contract development in this post here.
1. What is a smart contract
A smart contract can be defined as software that contains contract logic. This solution is usually running on the blockchain. As we know, there are multiple blockchain options that we know exist right now in the world. But most popular blockchain that is often picked for backing the smart contract audit services is Ethereum blockchain.
Many platforms have been utilizing Ethereum blockchain to operate smart contracts. Smart contracts work like an Ethereum account. They have a balance and can send funds over the network to the particular recipients. They can also receive funds from the senders. And all is done autonomously.
Smart contracts are not controlled and managed by the users. Instead, the developers of INC4 deploy the particular software to the network and run it as commanded by the programmers. The involved parties in the smart contract can interact with it.
Smart contracts completely replace the roles of the intermediaries. Well, they mimic the intermediary’s assignments such as regulating the contract, executing the actions, and so on. The interactions with the smart contract solution are irreversible. Therefore, it does not provide a single slit for anyone to tamper with the data.
2. What is the purpose of smart contract?
The purpose of the smart contract is straightforward. It focuses on autonomous and transparent business execution.
It is also important to know that the smart contract is not only viable for large enterprises. On the contrary, many small businesses and local businesses in some countries have seen smart contracts as the best replacements of agents.
Conventional business and legal activities still have loopholes. It is not surprising to listen to the stories about flawed and corrupt intermediaries. Well, we know what humans can do. Not all intermediaries are doing their job. Even though the percentage of errors is lower, you won’t want to risk your business when encountering the wrong party to deal with.
Smart contracts come up as a solution to replace the traditional contracts with the automatic method.
There might be different objectives to relate to this solution. Ideally, a smart contract is simply the business execution and transactions between the involved parties. Most of the time, the dealings with the help of a smart contract audit do not require the middleman to proceed. So, the paperwork and other complex bureaucracy will be the last thing you need to worry about when utilizing the smart contract for your business.
Few perks of the smart contract
Security
The distributed ledger or blockchain will keep the data safe and sound. Once it is there, the information is encrypted. Only people who are in the contracts will be able to check the information. Not to mention that not a single folk can tamper with it.
Zilch intermediary
Smart contracts can execute all of the actions autonomously. There is no need to rely on the middleman to carry out the particular transactions as agreed. Although, in some cases, the middlemen are still needed, we often see the lesser needs.
Fast execution
No need to wait for minutes, hours, or days to execute the actions. Once the conditions are met, the programmed innovative contract services will bring out the expected outcome. You won’t need to wait for manual work with risks of errors.
Transparent information
The contract information and terms are visible for all of the participants in the particular networks. If you are part of the agreement, you will quickly see the information.
Protection
As mentioned, only involved parties can access the information.
Well, that is true to the sky. The agreements between you and other parties are confidential. So, you will want to make it so forever. It is visible only to people who are participating in the contract. It does not permit external parties. Whether you are running a small or large business, you must select the best blockchain platform to serve these needs. Consider contacting your professionals at INC4 to help you out from the beginning.
Challenges
Accuracy of the results
A smart contract is a computer program. The developers coded everything, including the term and conditions. The more users will use the smart contract, the more possibility that there could be errors. But it shouldn’t happen if the developers have removed the slits of misinterpretation.
Bugs and errors
The bugs and errors in the code are sometimes inevitable. This could lead to disputes and misunderstandings between the parties. However, if you are handing over your project to the appropriate party like INC4, it won’t likely happen.
3. Life cycle of a smart contract
The life cycle of the smart contract development process has been effective, from simple asset transfer to more complex agreements between multiple parties at sensible scales. But here is the lifecycle of smart contract development in general.
- Defining the goals and use case of the smart contract
- Creating architecture
- Developing by using the development tools
- Testing the smart contracts on test-net or private blockchain
- Record the result of the testing
- Unit testing
- Fixing the bugs and errors
- Deploying the smart contract into the blockchain.
The process above seems straightforward. But the actual methods are tedious and time-consuming. The use case of your smart contracts should be crystal clear so that the development will be on the right track from the beginning.
The developers are responsible for gathering all of the crucial information of smart contracts like the business logic.
Consult more relevant topics with INC4 before picking the particular smart contract solution for your company.