Today, in a world where most payments are settled electronically, the creation of a sc is an important point. A prerequisite is the creation of a decentralized network, a cryptocurrency or a token becomes a payment tool.
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Smart contracts have successfully proven themselves in various areas, among which stand out:
- insurance issues;
- trading operations;
- affiliate programs;
- issues related to taxation.
In order to make this complex system work, you need to know all the nuances and be able to build it in a competent way. This can be helped by smart audit – contracts that our company of professionals can offer.
HOW DO SMART CONTRACTS WORK?
To understand how smart contracts work, consider a simple but regular scenario for any business – launching a monthly payroll calculation and distribution cycle. Traditionally, this task is performed manually by personnel hired to process payroll including vacations, taxes, performing the necessary calculations, etc. This requires skilled personnel, as well as a lot of time and effort. But despite the significant costs, mistakes are inevitable, because, as you know, it is human to make mistakes. What if this task is automated?
Using smart contracts to generate and process payroll data would definitely solve this problem. Let’s see how it works. This technology works according to the “if = then” principle. The SC contains a code that automatically transfers the salary amount to employee accounts.
SC can also streamline supply chain processes by allowing customers to shop from suppliers without going through traditional middlemen.
In trade finance, smart contracts can automate time-consuming processes like approval workflows and accounting calculations, and can be used in applications such as banking, tax reporting, real estate sales, and wholesale and retail supply chains.
- Depending on the level of automation, smart-contracts can be:
- fully automated;
- mostly on paper, however, some of the clauses of the agreement have been transferred to a smart contract, for example, transactions;
- with a copy on paper
Smart contracts are still at their experimental stage of development. Therefore, it is almost impossible to foresee all possible bugs when creating them. At least for now. And critical mistakes can often lead to irreparable consequences.
Consider the first decentralized venture capital fund the DAO on Ethereum. As a result of the attack using the vulnerability discovered by the hacker, the fund lost more than $ 60 million – they were gradually transferred to the accounts of the attacker.
Since March, contracts are most often used to buy / sell cryptocurrencies. But, with the more massive introduction of blockchain technologies, the synchronization of such platforms with other programs used in everyday life and the legislative regulation of smart contract development services, they can be widely used in the following areas: accounting and transfer of property rights; operations with securities; international settlements, for example, using a letter of credit; personal identification; financial reporting; processing loan payments; drawing up and transfer of bequest assets; checks for compliance of the supplied goods with established standards and the like.