First, let’s take a look at what smart contracts are and how they can be applied to industries that have not yet adopted them.Smart contracts
are self-executing, business automation applications that run on a decentralized network such as blockchain. The code controls the execution, and transactions are trackable and irreversible in most cases. Smart contracts are not a curiosity, the first example was written in 1994 by Nick Szabo. The Ethereum blockchain platform released its own version of smart contracts in 2015 and since then, many new applications have been developed with this technology.
What are the benefits of Smart Contract?
- Trustless: eliminates the need for third-party intermediaries, which can add delays and fees to transactions. Thus can lead to disruption of entire companies, like medical insurance industry players, replacing them with one smart contract
- Secured: provides a secure record of transactions that cannot be changed once recorded and almost impossible to be hackedc
- Transparency: histories of transactions transparent everywhere all the nodes in the network
- Interruption Free: once launched, usually it can’t be stopped or changed
- Smart technology-based: smart contract is almost an arbitrary program, so it can automate arbitrary business logic
Smart contracts can’t resolve legal issues, but if society is ready to adopt the absence of intermediary, they provide significant opportunities
for the evolution of our life.
For now, smart contracts are mostly used in financials or supply chains
. But, due to advantages mentioned, they have potential applications in many industries, which have multi-user platforms and can be decentralized
If the data is stored in a secure, decentralized manner, this can enable users to control their own data and prevent it from being accessed by government authorities or hackers. For example, Storj
offers cloud storage using blockchain technology and encryption to ensure that files are securely stored on the network. To ensure data security in such a high-tech system, the most relevant approach is formal verification
. Using this technology, it’s possible to create secure-by-design storage, which will not have any vulnerabilities and due to the most comprehensive resource usage ensure maximum data access speed.Social media
Due to the way it operates, it is difficult to prevent data breaches or censorship and manipulation of the content on them. The decentralized nature of blockchain makes it possible to store data in a secure and immutable way so that no one can access it without permission.Mobile Apps
In this case , blockchain could help developers to create a unique marketplace where users can buy and sell items. This will prevent the need for third-party vendors, which creates an additional trustless layer of security and transparency. Smart contracts can be used to streamline the development process and prevent piracy. This is possible because developers can use smart contracts to store information about their apps and games, such as user IDs, scores or other data. Users will also be able to access their data at any time in order to view it on a blockchain explorer.Video games
Industry with a lot of potential for cryptocurrency adoption. There are many ways that smart contracts could be used to improve the gaming experience, such as by providing players with a way to buy and sell in-game items without third-party vendors. This would reduce fees and ensure that users pay only for what they want — not for things that they don’t need.Marketing and advertising
Can also be improved with smart contracts technology. It can help publishers to verify that their ads have been seen by real people and provide them with data about the effectiveness of their campaigns. This could make marketing campaigns more effective, which in turn would allow developers to get better results from their advertising budgets due to the property of smart contracts to remunerate advertising services automatically based on measurable and public metrics.Corporate software
This is another field where smart contracts are useful . A blockchain-based system can help companies create and manage agreements with their partners, vendors, and customers. This would allow them to automate many of the processes involved in managing supply chains or other business relationships. One of the pioneers of this field — GOSH (git open source holder)
— blockchain-based github which provides secure software supply chain, using formally verified
CI/CD scripts and multiple signature.Task planners
Are another prospective field where smart contracts could be useful. A smart contract could help companies manage the tasks that need to be completed, as well as their budgets and deadlines. This would allow them to track the progress of projects more effectively and ensure that their employees are working on the most important tasks at any given time.Uber-like companies
Could benefit from the use of smart contracts. The ride-sharing service has come under fire for not paying drivers on time or in full, and there have been many complaints about Uber’s cancellation policies. A blockchain-based system would allow Uber to pay its drivers quickly, because they wouldn’t have to wait for a human to verify their claims before they received payment.Tickets and transportation
Smart contracts could be used to manage the sale of tickets for sporting events or concerts by ensuring that only authorized vendors could sell tickets and that the buyer would receive a digital copy of their ticket after paying online. This would prevent people from buying fake tickets, which has become an issue in recent years with websites like Craigslist
.Loyalty programs and customer perks
Loyalty programs and discounts for frequent customers are a common way for retailers to keep customers happy and coming back. But it can be difficult for companies to track who qualifies for these perks and when they’re due, which can lead to mistakes or oversights in awarding rewards. Smart contracts could help, by ensuring that only eligible customers were rewarded and that the reward was given at the appropriate time.Tourism and hospitality
As more people travel for leisure, it’s become clear that the tourism industry needs to be more efficient and customer-focused than ever before. Smart contracts could help by making it easier for hotels and other travel providers to manage their guests’ experiences — for example, by providing instant refunds in case of a cancellation or allowing travelers to book rooms without having to pay until they arrive.Social analysis and big data
Smart contracts could help in social analysis and big data by making it easier to collect and analyze large amounts of information. This can be particularly useful when it comes to identifying patterns that would otherwise be difficult to spot. Smart contracts could help social scientists gather and analyze data more efficiently. For example, they could be used to track the progress of projects like Wikipedia or OpenStreetMap — or even to organize data that’s already been collected.The sharing economy
For example, is based on a multi-user platform where many users can access the same resources. In this case, decentralized technology such as smart contracts can be used to ensure that the provider and user are both fairly compensated for their contributions — for example, by facilitating payment via cryptocurrency.Clearing (houses) and settlement (insurance)
Helping to speed up the process by removing human error and providing a more secure record of transactions that cannot be changed once recorded.Decentralization by smart-contracts
is most secure at the moment. The information is not stored on a single computer but on multiple network nodes, which makes it harder for hackers to gain access. If a hacker were to attack one of the nodes, they would need to compromise every single one in order to access any data.
Decentralization can be made not only in the information world but in real devices as well — and it’s already happening. The internet of things
(IoT) is a network of devices connected to each other and the internet, which allows them to send and receive data. These devices can include anything from lightbulbs to cars, and many companies are currently trying to create a fully decentralized IoT network that would allow these devices to communicate with one another without going through any central servers.One of the core obstacles for every mentioned application of smart contracts is lack of security
In some of them, like medical technologies, for smart contracts it’s critical to be not only absolutely secure but also correct by design and does only what it is intended to do.And here we come to the formal verification of smart contracts.
The main advantage of the formally verified smart contract
is that it only works as it was written in the formal specification and has no options for exploits
Using this technology for smart contract security audit, the whole blockchain field can be transformed and the main news in the media about blockchain may change from “another $100M hack”
to “another successful application of smart contracts to improve the life of humanity.”