How to Implement Smart Contracts in Your Business?

The talks around blockchain and its potential seem to be never-ending. Reputable business resources keep on emphasizing the role of smart contracts and the benefits they bring to FinTech, logistics, banking, and other industries. Hence, there’s no wonder that deal-makers who check out smart contracts examples start dreaming of applying this revolutionary technology in their areas of operation. But before you find out how to implement smart contract in business, you should decide whether you really need it.

Does Your Business Lack Smart Contracts?

The hype around smart contracts makes them seductive for deal-makers. But the attractiveness of the popular technology doesn’t mean you need it to develop your business. The application of smart contracts will be beneficial for you if:

  • You see that the parties within your sphere of work lack trust
  • You work within an industry where the central authority is not reliable
  • You want to increase transparency of the transactions, and your clients are not concerned about confidentiality of their data
  • You want to reduce the number of intermediaries involved
  • You need processes to run automatically

You’d better treat this short checklist seriously. If none of the points apply to your business than you should leave the dreams about adding “blockchain” word to the name of your company. The use of smart contracts for the sake of use makes no sense. Hence, look through the list once again and make sure you understand why you want to implement it. If you are sure, we’re ready to move on.

What Are Smart Contracts?

Like paper-based agreements, smart contracts define the rights and obligations of the sides. Only when all the conditions are met, the contract would be fulfilled. What makes these agreements different is that the rules defined are precise and not disputable – there’s no chance that parties of a deal would treat the conditions of the contract differently.

Source: BlockchainHub

How to Apply Smart Contracts to Business?

The key concern connected with smart contracts’ implementation is that it requires an understanding of programming. Hence, the first thing you must do to build a blockchain solution for your business is to hire a team of skilled developers who know how to deal with distributed ledgers.

The expertise of the developers is your major resource as when you use smart contracts for business you have no right for a mistake. Any contract deployed would be performed automatically, and, in a case it contains a mistake, there would be no chance to correct it as all the results are registered on a blockchain. Hence, if your team lacks experience and knowledge of smart contracts development, you must be aware of the risks you might encounter.

When you are done with gathering your team, you can relax a bit as your developers will take care of the technical side of the contracts preparation. In particular, they will:

  • Choose a blockchain platform that suits your needs (e.g., Ethereum, Quorum, etc.)
  • Design the nodes, APIs, take care of hardware and all the required configurations
  • Define the rules and conditions that must be outlined in smart contracts
  • Test the contracts to make sure they contain no mistakes and vulnerabilities

All these stages are required to implement smart contracts in your business. But the technology is rather young, and the amount of efforts you pay depends on the complexity of the solution you want to build.

The Varied Level of Complexity

Depending on the aims of companies that apply smart contracts, the complexity of the latter varies. For instance, you may want to protect the funds of your company and manage them securely. In such situation, you don’t need a complex solution. What you need is a service with a convenient interface for writing smart contracts. There’re several tools like that (e.g., Asset Manager by Ambisafe Software). They build a bridge between blockchain and deal-makers and make it easy for ordinary people to apply the technology without knowing programming.

Meanwhile, you may have an ambition to build, let’s say, a distributed autonomous government. Under such conditions, you need a small army of your own smart contract architects to bring your idea to life.

Source: PwC

Advantages and Drawbacks to Consider

It doesn’t matter whether you own an international enterprise or a small business. If you decided to apply smart contracts to tech business or any other, you have to evaluate all pros and cons meticulously. Among the benefits you can’t deny are:

  • Transparency of any deal. You don’t need to fear fraudsters and insincere partners as they have no chance to break the conditions of a smart contract and take advantage of you.
  • The automatic fulfillment of a contract eliminates the need for intermediaries, hence, reduces the impact of the human factor.
  • The lower cost and the higher speed of business processes.

At the same time, you can’t neglect the risks inherent to smart contracts. After all, they are written by developers, and any of them might make a mistake. Hence, when you decide to conduct your business with the help of smart contracts, you must make sure that your developers are attentive and trustworthy enough.

Blockchain image via Pixabay.