Saving costs is the great challenge, objective and dream of companies, but not the only one. Improving data quality, increasing productivity and being more efficient are also notable desires. But the truth is that thanks to Smart contracts, or smart contracts, we do not even need a variety of applications to achieve these goals, but these contracts can do it for you. Its automatic nature, its self-executing capacity, its information stored in blockchain and its immutable nature make it a perfect system to save costs and take a step further in the digital transformation of your company.
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Can you save costs with a Smart contract?
The answer is YES. In the last 10 years, after the creation of the first cryptocurrency in history, Bitcoin, there have been many projects that have taken off with Blockchain technology, or blockchain, in order to create a more decentralised world, accessible to anyone, regardless of their economic level. Because one of the great advantages of this technology is the possibility of reducing financial poverty in the world.
how many contracts have you created or signed in your lifetime? Whether for a job, a rental property, or anything else, it is nothing more than an agreement between two or more parties specifying what can and cannot be done, the conditions, and what happens if something is not done according to the rules of the game. Until now, contracts have been verbal documents subject to laws and jurisdictions, involving costs, time and the intervention of third parties.
Smart contracts follow the same essence, but the methodology changes. In other words, their objective remains the same, but now it is executed and fulfilled by itself automatically, without the need for intermediaries. Thanks to these factors, the new contracts avoid the difficulties of interpretation, do not give rise to errors and are based on 'scripts', i.e. computer codes that are written in programming language.
With them, you do not have to worry about compliance, nor do you have to go through a notary or other professional, which means cost savings. It can be created by individuals or legal entities, but also by machines or other automatic programs. It is fully valid without the need or dependence on the authorities, which is achieved thanks to its nature. The blockchain makes smart contracts a code visible to all that cannot be modified, thanks to blockchain technology.
increase transparency and decentralisation while saving costs on your contracts!
what else can we do with a Smart contract?
Perhaps, it would be better to ask the question the other way around: What can a Smart contract do for us? In any case, this technology is a consequence of the blockchain, that famous breakthrough that is so much talked about in sectors such as finance, automotive, health, tourism, logistics and a long etcetera. Smart contracts can do many things for us, in addition to saving costs. Here are some of them:
- They reduce the number of intermediaries, as a smart contract eliminates the intervention of third parties, such as banks or notaries who provide confidence in the agreement.
- Real-time updates, which increases the speed of processes.
- Reduced execution risk, as it is virtually impossible to modify, which increases transparency.
- Increased accuracy, which in turn reduces the possibility of making a mistake in the execution or performance of the contract.
Smart contracts are a technology with a lot of potential, through which to carry out financial transactions, transfer rights and obligations, automate donations or inheritances, manage copyrights, use payment systems... Thanks to their automatic and reliable nature, more and more people are opting for these contractual transactions.
if you have any doubts, we will be happy to answer them for you. We will listen to you without obligation, remember that.
do you know the first smart contracts?
Smart contracts were first known about by the jurist and cryptographer Nick Szabo in 1995, but it was not until 2009 that this technology became a reality through the blockchain. The father of this idea synthesised some terms related to the blockchain that would help us to better understand this technology. Concepts such as agent, contract, parties, distribution of contractual keys and contractual security would change their meaning forever. They would establish a new paradigm based on automation, security and compliance.
Some of the terms most commonly used today to understand smart contracts are:
- Cryptographic protocol, which uses mathematical principles and different keys to fulfil the main objectives of these contracts.
- Nym, or identifier that functions as a link between a small amount of information related to a subject, some data that the nick holder believes is relevant to the community.
- Symmetric cryptography, or secret key cryptography, and asymmetric cryptography, or public key cryptography.
- Digital signature, a cryptographic protocol based on asymmetric cryptography that verifies that an object is in active contact with the private key.
- Cash flow, a term widely used in traditional forms of payment, but also part of smart contracts, as cash flow is the expected sequence of payments based on the terms of a contract.
Smart contract, "a simple and understandable approach that provides a schematic representation of the structure and potential of the blockchain".