The virtual industry has recorded lots of achievements over the past few years, with the emergence of e-commerce companies and escrow services amongst the best that has happened to the industry. However, every sector of the global economy has had to deal with some unpleasantness in financial services such as huge bank charges, centralized system of payment processing and slow transaction speed. PayPal and other digital payment services came along to solve some of these problems but nothing concrete was achieved until advent of blockchain and products.
Bitcoin was the first cryptocurrency that was created and was developed using the B-Money and HashCash models. Satoshis Nakamora created Bitcoin with the aim of it becoming a form of payment that protects businessmen and women from double spending scenarios by making use of lots of computing power just to verify transactions. Due to the fact that transactions are usually the transfer of information from one location to another. The data are secured using a proof-of-work protocol which brings a lot of benefits to businesses.
What exactly is a Blockchain?
Cryptocurrencies couldn’t have been possible without the blockchain. The blockchain technology allows several people to write entries into a record of information. Thereafter a community of users is given the ability to control how the recorded information is updated, amended and used.
On the blockchain network, transactions are usually broadcasted and every node is tasked with creating its own updated version of a particular event. The technology can be regarded as an innovation in information registration and distribution which eliminates the need for another body to facilitate the transfer of such information. This feature is what is known as the decentralization of blockchain. Every individual in the network is given total control and access to his information and no central body is given control over the network.
The blockchain network also ensures that the international money transfer issues are a thing of the past. The industry which is still affected by issues such as strict government policies and high transaction fees have made it hard for companies to conduct business outside their normal jurisdiction.
Using the blockchain technology, cryptocurrencies are used as means of payment both locally and internationally. Their transaction time is very fast compared to the conventional money transfer methods. The high costs of international money transfer have also been eliminated using cryptocurrencies as only a fraction is being charged for transactions globally.
The blockchain thus has been able to give the power of control of information to the people, it has eliminated the need for third-party services to facilitate transactions and have made international money transfer easier and less costly than before.
Smart Contracts Are One of the Benefits of Cryptocurrencies
The blockchain network has several advantages such as decentralized payment systems. One of its benefits is the development of smart contracts. The blockchain technology and smart contract are interconnected. Without the blockchain, the smart contract wouldn’t work.
A blockchain is regarded as a distributed ledger that is available worldwide, where the data written on it cannot be altered afterward. This data makes it possible for data to be exchanged securely. The data can be anything digital, be it currency, titles, or deeds on houses.
What Do Smart Contracts Represent?
If you happen to be a procurement professional, then the speed of making decisions is one feature that will serve you well. Your decision and its quality is solely reliant on the genuineness of data at your disposal. The smart contract can be of help in this case.
Processing can become so much easier and better when the data movement process is free and transparent, A smart contract is a computer code that has the ability to monitor, execute and enforce an agreement between two or multiple parties. The conventional coding used by banks has been advanced by smart contracts. The smart contract combines these coding with the blockchain technology so as to interact with multiple financial systems at a time. It also interacts with asset registers and others.
Using a smart contract on a public blockchain which is also permissionless would eliminate the control of execution by third parties which the third party usually wield. The interaction would also be open, i.e. it will no longer be limited to closed systems. The execution of contracts is verified by a network of computers that are connected to the blockchain. The same network of computers would also be tasked with updating the blockchain so as to record the execution of the contract, afterward monitor the blockchain to ensure that the terms of the smart contract are respected and followed.
The potential of the smart contract is enormous. It could ultimately change the way business is done globally.
Are smart contracts the future?
We are getting there. A blockchain that has sufficient interconnections between the financial systems and assets register hasn’t been developed yet but it is expected that they will be at some point in the future.
The certainty of smart contracts and their codes is seen as a key advantage in this industry compared to the conventional language which is plagued with several negative factors such as ambiguity, sub-text, and misunderstanding. The smart contracts effectively remove misunderstandings since the replication of intentions can lead to extra costs.
Why Does My Business Need Blockchain?
Blockchain technology has enormous potential. Companies all over the globe are recognizing its importance and using it in one sector of their business or the other. The blockchain technology alongside the smart contract have the ability to improve the quality of your business and in the process reduce the number of middlemen involved in transactions.
Once that happens, your business will benefit from more profit. It is expected that the blockchain and smart contracts would influence the way businesses would be done globally for decades to come. It is therefore important that you take advantage of this technology in its early stage as it will ensure that you are setting your business up for success.
To sum it overall, the blockchain and smart contracts are perfectly placed to change the business world for decades to come and it will be an excellent move if you get on board at this early stage.