Having explained the nature of smart contracts, their specifics, advantages, and limitations compared to traditional contracts, we are now equipped enough to take a step forward and examine the practical applications of this highly promising blockchain-based technology.
In this article, we will review several real-life examples of smart contracts' applications in order to understand what their role could be in the evolution of various industries. We want to help our readers associate the potentials of the technology with their own needs and to provoke real, practical questions, which the team of Toshev and Boteva Law Firm is always eager to discuss.
Let's start by looking at some industrial and business sectors in which smart contracts would allow a valuable time, financial and human resources optimization process to take place:
Any insurance company's primary intention is to establish a formal agreement with the insured person, which guarantees coverage in accordance with a set of documented conditions. Insurers handle user claims resulting from various incidents and life events that trigger the activation of the agreement. Smart contracts are a supreme mechanism for automating this type of business process - from the production of a formal agreement to the activation of the mechanisms regulating the financial transaction.
Decentralization and digitalization are a couple of processes that have progressively transformed the energy sector in recent decades. Alternative energy sources and the ever-growing number of "green" energy suppliers generate a need for a reliable mechanism to support the quick and protected transfer of resources.
Smart contracts can secure the process of energy production and distribution according to a set of predefined conditions, but also facilitate the integration of digital technologies such as IoT, monitoring the exact energy flow between generators and final users.
Smart contracts are only a tiny part of how blockchain technology could potentially contribute to the medicine and healthcare sector. They provide a high level of encrypted security, guaranteeing the protection of data exchanged between users, patients, and medical staff. By using smart contracts, patients can move from one hospital to another quickly and easily, without having to fill out numerous forms. In addition, patient data can be conferred to any chosen medical specialist by using a personal blockchain record.
Arts, culture, and entertainment
Copyright and intellectual property protection are processes underlying the distribution of virtually all art, culture, and entertainment products - media, television, radio, publishing, cinemas, theaters, etc. Smart contracts can speed up and facilitate the process of purchasing copyrights and patents, which is currently cumbersome and inefficient. Discovering the ownership and terms of the patent, conducting the trading negotiations, completing the monetary transaction, and recording it in the registers are processes that smart contracts could easily manage with minimum external intervention.
The public and government sector
Smart contracts can optimize government processes in many ways. One of them is, for example, tax collection by automatically balancing tax data with incoming transactions and calculating tax and social security expenses. The blockchain-based system of smart contracts can then automatically transfer net salaries and tax payments to the respective beneficiaries.
Virtually any type of trade can benefit from the use of smart contracts through secure financial transfers, easy activation of loyalty programs, control over the production and supply chain, and more.
The partners in Toshev & Boteva Law Firm are always eager to answer your questions and provide personalized advice on the applicability of smart contracts in each particular case. We strive to be a pro-active participant in shaping the technological future - both in the field of law and in all industries served by it.
Georgi Toshev is a lawyer and Managing Partner at Toshev & Boteva Law Office, leading a dedicated team of lawyers who invest time, resources, and efforts in exploring blockchain technology and defining its legal status as a key technology of the future. Because the world does not change all by itself. We are the ones changing it. Have an idea? Brainstorm with us. https://www.toshevboteva.com//contacts
Have an idea! Brainstorm with us.