Smart contracts utilise the blockchain technology to help people exchange goods transparently, whilst avoiding the need for a middleman. The system works using the if-then premise. For example, if Mr.Bloggs turns up for a full day of work today, then he will be paid his day rate, if he doesn’t, then he won’t be paid. Smart contracts can be layered up with all the usual terms that you’d find in traditional contracts but with the ability to automate every rule.
We predict that over the next few years, we’ll see a sharp rise in smart contracts being used in favour of traditional contracts. Below are 7 reasons why.
Traditional contracts require a lot of back-and-forth communication and can take hours to create. With smart contracts, the code automates tasks and saves you precious time.
Smart contracts are simple and therefore do not require intermediaries to be involved. Which means smart contracts do not require intermediaries to be paid. Cashback.
Whilst traditional contracts can be lost, with the blockchain, your documents are duplicated many times over. That means that even if your machine breaks, you can easily retrieve a copy of the contract.
If the agreed service did not meet requirements, then smart contracts can automate penalties. The great thing about having automated penalties is that no emotions are involved.
AUTOMATE CONTRACT EXPIRATIONS
Smart contracts can be trusted to simply expire when they’re programmed too.
Whenever you cut out the need for people to be involved in a part of a process, then you’re reducing the risk of miscommunication which often happens between human beings.
Smart contracts avoid human-errors which are found in manual contracts.
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