From the moment we are born, we enter into moral and physical contracts that oblige us to comply with a series of conditions over a certain period of time. We are born with the condition to live. We live with the condition to become fully-fledged people, with a job, a dream, a house, and free time for ourselves. However, each of these actions requires agreements that record the conditions under which we are going to live. Employment contracts, housing rental contracts, customer service contracts, etc.
Although this is a very logical reflection, technology is transforming the way we sign and fulfil these contracts, as a direct part of them. It is a phenomenon that happens through Smart Contracts, or intelligent contracts, which have the capacity to be fulfilled automatically after the parties agree on the terms. They are authentic computer programmes written under a virtual code, software programmed to perform a task according to previously entered instructions.
In Spain, this phenomenon is slowly becoming a trend thanks to blockchain technology and the Internet of Things (IoT). Throughout this post we are going to show some examples of this. Ready? If at the end you have any doubts, ask us without obligation, that's what we are here for.
3 examples of Smart Contracts in Spain
Although for many it is still an unknown technology, in 2020, blockchain technology has already become an advanced phenomenon. Its application is not only visualised in the financial sector through cryptocurrencies, but it is already being applied in other sectors, such as: automotive, health, industry, public administration, tourism, etc. This is the proof of its growth and proliferation in society.
Below, we are going to show you some examples of the application of smart contracts in Spain:
- Real estate market.
The possibility of applying blockchain technology in the real estate sector is already being studied for one reason: it improves intermediation and legal security. Today, most properties are managed through manual paperwork and programs that are not properly integrated, so that information is not 100% accessible and runs the risk of being lost. With the use of Smart Contracts, the entire management process could be carried out in a secure, fast and transparent way.
For example: the use of a decentralised application that uses smart contracts allows the tenant and landlord to sign the contract digitally. This includes the conditions of the rental price, payment frequency and other details. An example of this phenomenon is BrickEx, a startup that uses the blockchain as an open and decentralised platform for property exchange.
Imagine you bet 300 euros that a football team is going to win. And meanwhile, a friend bets the same amount with his favourite team. The amount will be controlled by a smart contract, and when the match is over, the contract will be in charge of verifying who the winner is, who the money belongs to and where to deposit it. This automatic process is so fast and effective, that some bookmakers are already applying it, such as BetMatch, a decentralised bookmaker that combines the classic model with blockchain technology.
Its main characteristics are: it eliminates the influence of the human factor and third parties, it guarantees the transfer of payments and its transparency. The rise of blockchain betting is becoming more and more meaningful, since thanks to the qualities of security and decentralisation, only interested persons can access it, complying with regulations and avoiding access by minors under 18 years of age.
- Legal sector.
Smart contracts also form part of the legal sector, as they can establish the methodologies that law firms need to improve legal risk management and comply with the various regulations governing the company.
Law 34/2002 of 11 July 2002 established the bases for electronic commerce and the information society, underlining that these contracts produce the consequences foreseen by the legal system when consent and the rest of the requirements are met.
In this way, blockchain technology has become a perfect weapon to prove the existence of an agreement of wills.
Other applications of smart contracts
Don't think that these are the only applications of blockchain technology in society. We citizens are, little by little, noticing its presence in our daily lives. Imagine that you buy a leased car, and at a certain moment you forget to pay an instalment. Thanks to the Smart Contract, the car might not start, as it would be programmed so that this would happen if the conditions set out in the agreement are not met.
Smart contracts in Spain are already a legal reality that has been applied for some time, although they have been gaining importance with the discovery of blockchain and bitcoin. This is the technology behind them, and thanks to it, smart contracts have become self-executing agreements with legal effects that are self-executing.
Banking and financial services are also part of this reality, not only because of their presence in blockchain technology, transactions, loans between individuals, etc., but also because they can control defaults. Imagine you are a bank and a person has missed a series of mortgage payments without notice. In this situation, the bank could code a smart contract that imposes the rules and conditions.
"Today, blockchain has become what the internet was in the mid-1990s: most people have heard of it, few know how it really works, but everyone has an opinion about it.