What is a Smart Contract?
“Anything that removes a middleman and gives me direct access to what I really want is beautiful.”
Jon Crawford, Storenvy
A brainchild of Nick Szabo a cryptographer in mid-nineties, tax smart contract can be called as a digital contract or a self executing contract. So what exactly does it offer? lf contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. A smart contract simplifies the complexities involved with a middleman, it enforces all the terms and conditions automatically without the intervention of a third-party. No hassles of going to a notary or an advocate. The terms and conditions are simply coded into the contract and if the conditions are met the contract executes itself. Since its available on distributed ledger platform like Blockchain, a smart contract is immutable and secure.
One can use smart contracts for all sort of situations that range from financial derivatives to insurance premiums, breach contracts, property law, credit enforcement, financial services, legal processes and crowdfunding agreements.
Role in Supply Chain
Smart Contract work on the basic premise of If-Then. To simply put it in Jeff Garzik’s Words “If I receive cash on delivery at this location in a developing, emerging market, then this other product, many, many links up the supply chain, will trigger a supplier creating a new item since the existing item was just delivered in that developing market.” As we know, supply chains are manhandled by paper-based systems, where forms have to pass through numerous hands for approval, which increases exposure to loss and inflict lack of transparency. The blockchain nullifies this by creating a secure, accessible digital ledger to all parties on the chain and automates tasks and payment.
In Smart Contract we Trust
Smart Contracts provide autonomy and trust. Since you are making the agreement yourself, you don’t need a broker or a lawyer. Consider the savings on a million such transactions and not to mention the freedom from the hassles involved. Long gone are the days when trust was put in the middleman .“Always remember young man, the art of good business is being a good middleman” a dialogue from Matthew Vaughn’s Layer Cake 2004. The future is digital and without the presence of a deceitful middleman. In a smart contract your documents are stored on a encrypted distributed digital ledger, so you can invest your worries on issues other than safety and security. Any change on this ledger is reported to all parties simultaneously and recorded in an indelible manner.