Embracing automation will have a significant role in the process towards digital transformation, which can include working with smart contracts.
Is your business following a path towards digital transformation? If so, embracing automation will have a significant role in this process.
When you think about automation, what are the first things that come to mind?
For many of us, automation means using SaaS platforms and apps to reduce your team members' workload and make workflows more efficient.
However, this is a very simplified view of the changes you are making. What automation actually helps you achieve is to use and structure data in such a way that you can improve your processes and outcomes.
The great thing about this change? It is not just you and your team that benefit; your clients and customers reap the rewards, too. This happens regardless of your industry and whether you provide a physical product or a service.
We can see one such example of automation working in this way in the use and benefits of smart contracts.
When people think of smart contracts, their first association is typically with Bitcoin or other cryptocurrency transactions. The smart contract effectively makes up the Blockchain ledger of transactions. It is what allows people to buy and sell goods or services with cryptocurrency without any third-party involvement.
From this analysis, it is easy to conclude that you need Blockchain technology to have a smart contract.
However, as we will explore now, you do not need to have a Blockchain, a cryptocurrency, or any technical knowledge or competency to use smart contracts in your business.
If you already use automation in your business or even use something like a calendar app to arrange your personal life, you are probably familiar with the phrase “If This, Then That.” There is even an app with the name, which helps you integrate your apps and services in much the same way as Zapier.
In simple terms, this is how smart contracts work!
Smart contracts are simply a trigger to perform a specific action or provide something if the necessary input is given. In this context, smart contracts are often referred to as self-executing contracts.
Even with such a simple overview, the potential for smart contracts to transform your business is likely becoming clear.
Using smart contracts can:
Some smart contracts may also be considered smart legal contracts, depending on how they are constructed and executed. However, it is vital to recognize that not every contract is a smart legal contract. As such, not every smart contract may be legally enforceable.
Smart contracts and smart legal contracts outside of their use in a cryptocurrency context are still considered an emerging part of the legal profession.
There are several ways in which you might execute a smart contract without the need for blockchain technology.
The oldest and often most cited example of a smart contract is a vending machine. This is a head-scratcher for many because vending machines are almost as old as time! However, let's think for a moment about the logic of how a vending machine works. If you press D4, the machine tells you how much your drink or snack costs. If you then pay the requisite amount, the machine gives you the product.
In the modern business world, using smart contracts without blockchain can help you:
And you can do all of these without a Bitcoin wallet or replicating the energy consumption of a small nation!
Are you already using smart contracts in your business without realizing it?
If so, you might not yet have explored the full breadth of possibilities they provide and could still have loads of potential to unlock around their use.
If you are not yet harnessing the power of automation and smart contracts, how your whole business works and delivers services or goods could be about to change!