The most promising application of blockchain is smart contracts. This is because these are interoperable and incorruptible, which adds an extra layer of transparency and security.
It can boost the confidence of people and encourage them to move towards a fairer system. Now we shall know more about smart contracts.
Traditionally, when two parties decide to enter into a contract, a document is drafted by lawyers that outline all mutually agreed-upon terms and conditions. Once both parties sign this document, it becomes legally enforceable.
Smart contracts, on the other hand, are self-executing contracts with the term and conditions of the agreement between the buyers and the sellers which is directly typed in the code. The code and the agreement exist in a decentralized, distributed blockchain network.
It allows trusted transactions and agreements which are carried out between anonymous and separate parties. These agreements take place without the need of any central authority, the legal system, or any type of external enforcement mechanism. It renders transparent, traceable and irreversible transactions.
The reason why the users opt for the smart contract is that it’s faster and convenient. There is no need for a middleman which would be time-consuming and cost-effective. Another reason is, security and easy for us to exchange anything with monetary value, money, property and even shares.