You may be unsure of their capabilities if you are new to smart contracts. This article will attempt to clarify confusion by sharing the best smart contract use cases available. In reality, smart contract use cases vary depending on where companies use them. So, let’s see real-world smart contract use cases to learn from.
1. Digital Identity
Digital Identity is one of the most obvious smart contract use cases. Individual identity is one of a person’s most valuable assets. It is made up of reputation, data, and digital assets. If used correctly, a person’s digital identity can open new doors. Furthermore, digital identity can help protect the identity from counterparties and allow him to share it with companies he intends to share it with.
Currently, the internet enables you to connect to a variety of services while unknowingly sharing your identity with companies that are associated with having your identity mapped.
Smart contracts can help counterparties learn about an individual without knowing their true identity or verify transactions in this case. With smart contracts, this frictionless KYC can help improve interoperability, resilience, and compliance.
2. Cross Border Payments
Smart contracts have the potential to revolutionize trade finance. There is no doubt that the use of a Letter of Credit can aid in international goods transfer and trade payment initiation.
Using smart contracts will improve the liquidity of financial assets, thereby improving the financial efficiencies of suppliers, buyers, and institutions.
To make smart contracts work in trade finance, particularly in cross-border payments and international trade, an industry standard must be identified and implemented.
It can undoubtedly solve legal complications and provide a better way to resolve disputes between parties if adequately integrated.
3. Loans and Mortgages
Smart contracts can also aid in the improvement of financial services such as mortgages and loans. As a result, it can connect the parties and ensure that the entire process runs smoothly. Furthermore, it provides an error-free operation. For example, a smart contract to manage a mortgage can manage it by tracking payments and releasing the property when the loan is completely paid off.
Another advantage of using smart contracts in financial services is that all parties involved have visibility. This is also one of the Ethereum smart contract use cases.
4. Financial Data Recording
Financial data is critical for any organization. This is where smart contracts come into play. They provide access to data records to collect more accurate and transparent financial data. Smart contracts make it simple to manage uniform data recording across an organization, resulting in lower auditing and reporting costs.
Finally, it reduces accounting costs and improves interoperability between legacy and distributed ledger networks.
5. Supply Chain Management
Supply chain management is an excellent blockchain smart contract application. The supply chain can be vastly improved by utilizing smart contracts. It can, for example, be used to track items in the supply chain with complete visibility and transparency. Smart-contract-powered supply chains can help a company improve inventory tracking to a granular level.
It also benefits other aspects of the business that are directly related to the supply chain. Furthermore, using smart contracts means less verification, and improved tracing results in fewer frauds and thefts. However, for it to work, the institutions must add additional equipment, such as sensors, to their supply chain. It is also an example of a smart contract application.
Conclusion
Smart contracts are critical to our economy because they can provide the automation required for decentralized platforms. Smart contract use cases, such as escrow, clinical trials, insurance, and government processes, offer a novel problem-solving approach! SmartOSC uses digitalized and automated operational processes to facilitate fast transactions in smart contract service. So, contact us if you need help.
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