Blockchain Technology: not just for Cryptocurrency or Bitcoin
Imagine a place where you can securely store all personal information and only you decide who has access to it. You can pick which parts of that data you need to share, and you can simply renounce that access.
On the off chance that this place ever appears, I am willing to bet it will be built on block-chain technology.
Blockchain technology is still especially being developed, however, those up to date are persuaded it will change numerous business sectors and ventures. Along these lines, subsequent to digging into the workings of blockchain and crypto-currency, it’s time to have a closer look at what blockchain technology can do outside the realm of cryptocurrencies. Most of these possibilities take the form of smart contracts.
The articulation “shrewd contracts” was authored by Nick Szabo well before blockchain innovation was refined. He imagined an innovation intended to supplant legitimate contracts, where the terms of an agreement could be digitized and computerized. An activity (installment) could be finished when the condition (conveyance) was met.
After the introduction of the blockchain, the expression “smart contract” was utilized all the more generally as software that runs calculations on the blockchain.
I utilize the term transactions softly here since it would appear to infer that we are as yet talking about crypto-currency, which isn’t the situation. We call them transactions because of the protocols that are in place to determine whether a contract is considered fulfilled.
Positive application of smart contracts
Here are some examples of how companies can benefit from using smart contracts. Using blockchain technology, they could:
- Design a completely computerized inventory network management system.. At the point when a specific condition is achieved, the appropriate action is taken. Imagine a factory that automatically orders supplies when it threatens to run out of them.
- Manage huge paper trails. Each step in the paper trail can be added as a new block in the chain, and checks can be placed to ensure all conditions have been met that are needed to proceed.
- Exchange vital business data progressively. Each hub can add to and get to all the information in the blocks.
- Eliminate the go between when managing others. The gatherings can interact directly and safely, by depending on the blockchain technology.
- Eliminate fraud. Irreversibility makes it fraud-resistant. In an appropriate setup, there is no real way to roll out unauthorized improvements in effectively approved blocks.
Potential pitfalls of smart contracts
Reasons why companies might shy away from using blockchain technology for certain parts of their business include:
- The substance of the contracts is visible to all members. There are a few sections of your business that are not appropriate for public knowledge. So there might be a need to encrypt certain information.
- It’s difficult to correct errors. You would need to reverse around the contract once a faulty one has been approved.
- Long development and implementation are expected to supplant existing solutions on a large scale. This may enhance when we are all the more well-versed in applying this technology.
- In the event that by and by identifiable information needs be put away, this could break local or international regulations. For example, smart contracts would have a hard time complying with privacy laws like the upcoming GDPR.
- A completely dispersed system offers a bigger surface for hackers. Remember that all the nodes have access to all the information. So it could pose extra risks if a hacker can access a node or pretend to be on.
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