Understanding Smart Contract. [Part 2]
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It's good to have you back here friends. No doubt, you've been getting value in this space. Anyways I would also ensure I keep dishing it. So in my last piece I talked about smart contract and how it works.
Today we will be going much deeper, this will be the concluding part of it and it would captured the advantage, disadvantage and most importantly, the use case of smart contracts.
We all know that everything around us have both good and bad side except God our creators. Smart Contract is an awesome development but then there are side to it that looks like limitation. Maybe in the near future there could just be a way around them, I mean in terms of improvement. Let's get into it right away
Transparency: Let's not forget that smart contract run on blockchains which by default is transparent. This therefore mean any activities carried out via the smart contract is always transparent as it's visible for all to see. Nothing is hidden.
Immutability: this is another advantage of smart contract, the fact that there is no middle man watching the transaction process doesn't mean transaction carried there would be manipulated, never! This is because, there is a feature called Immutability which ensure nothing is changed or altered.
Automation: it works independently after being programed to work in a certain way, when conditions are met, the contract is implemented automatically without interference.
Accuracy: Smart Contract are designed with well defined parameters that prevent against ambiguity or mistakes in the course of transacting with it. And this feature stands out to be one of it core advantage.
Saves Cost: have you ever entered into a contractual agreement with someone in the traditional paper pen way? If you have, you would agree with me that it quite expensive and demanding as you would be asked to get a lot of docs in place and you would also need the service of a lawyer for authentication...all those cost have been reduced to the nearest minimum under smart contract.Hence it cost saving advantage.
Efficiency and speed: The advantages of smart contract wouldn't have been complete if this particular one was left out. Smart contract save precious time and it's also very efficient and comfortable and convenient.
Immutability: Immutability that is supposed to be and advantage might become a disadvantage if at the end of the day the smart contract that was coded didn't work as expected after being deployed on the blockchain. At this point, it can't be altered. This is why it must go through a lot of scrutiny before it's deployed.
Regulating Factor: From my findings, there are no clear regulations or rules guiding smart contract and this can really be a challenge. There is this common saying that..."where there is no law there is no sin". Meaning folks can take advantage of this singular loophole to pursue their selfish Interest.
Risk of being Hacked: hacker are always on the look out to take advantage of any loop hole discovered in the code formation of the smart contract which could be as a result of carelessness, negligence or oversight on the part of developers.
Therefore adequate care and due diligence must be taken when writing or programming a smart contract especially the one that has to do with finance into a blockchain. It's also important to mention that there are several use case some of which I have itemized below.
Defi: This simply means decentralized finance. Smart contracts are used to power financial related services like lending, borrowing, exchange and all manner of financial service. This makes it easy and cheaper since the cut that middle men would have gotten has been eliminated
Real Estate: Smart contract has also been found useful in this field as it help facilitate transactions that has to do with properties, leasing and renting and all manner of agreement associated with property ownership.
Insurance: Smart contract is also useful in the area of insurance especially when it comes to claim. Some dubious folk would always want to manipulate claim on property insured but with smart contract everything is laid bare in such a transparent manner and this makes claim management easier on the path of the insurance company.
There are still other several use case for smart contract but I'ld love to limit it to these few. You can always DYOR to get more if you're really thirsty for more...smiles.
I trust you got value from this post. Do well to share your thoughts with me in the comment session. Gracias!
Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.
Regards
@lhorgic♥️
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This is a nice continuation on smart contracts you have written, you have explained the advantages and dis-advantages of smart contracts.
You also explained the use cases but I expected to see more explanation from the use cases you gave.
Keep making quality post!
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Thank You.
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