The Businesses of the Future will be governed by Intelligent Contracts.
Smart Intelligent contracts are agreements in which two or more parties agree to comply with a series of conditions, and their fundamental elements are the same: the voluntary consent of all parties, the object of the contract (good or service), and a just cause, true and lawful. Smart Contracts are possible thanks to the Blockchain technology, which also made possible the creation of Bitcoin digital currency since 2009, in 1997 the jurist and cryptographer Nick Szabo, for the first time in the world, defines in detail the concept of smart contracts
In this way, these smart contracts have the capacity to modulate transactions according to the levels of trust of the parties involved. Being written in an encoded language cause that none of the parties that are involved in the agreement are able to know the internal operation of the same, an smart contract is designed under a concept of conditions that will bring agility to the business sector. These contracts work in the blockchain and, a priori, they do not need the intervention of the people to verify and execute their compliance.
Also, they are “scripts” (computer codes) written with programming languages, the terms of the contract being sentences and commands in the code that forms it. Therefore, an intelligent contract is capable of being executed and enforced by itself, autonomously and automatically, without intermediaries or mediators.
They avoid the burden of interpretation by not being verbal or written in the languages that are normally spoken. Thus the contracts can be converted to computer code, stored, replicated and supervised by the network of computers on which the Blockchain runs. This would also result in a system of transferring money and receiving products or services.
In the same sense, by substituting human management for the intelligence of a system; which also has the ability to account for, determine, secure automatically and securely the conditions of a contract at a lower cost, it is possible to determine that artificial intelligence has become a better option. The result is a virtual armored agreement with all eventualities covered, so that if all the parties deliver what was agreed, there will be no possibility of fraud.
Therefore, the purpose in the design of smart contracts is to allow people to trade and do business with strangers, usually through the Internet, without the need for a centralized authority site to act as an intermediary.
Among the most recognized intelligent contract platforms is Rootstock, one of the most used systems by Bitcoin investors. IBM vice-president of Blockchain technology, Jerry Cuomo, believes that smart contracts can be used in many sectors, from financial services to medical care and insurance.
In the same way, it is possible to make intelligent contracts with Bitcoins, however, it is necessary for a software to execute the management of the agreements, since this cryptocurrency does not have that system. In 2014, two open source platforms for the implementation of smart contracts emerged:
Codius: developed by Ripple Labs, a company that has also created its own digital currency called Ripple, is designed to work with various cryptocurrencies.
Ethereum: initially developed by a young programmer, Vitalik Buterin, when he was just 20 years old, he works with a completely new payment system and currency. The currency is called “ether” and its development was financed by crowdfunding.
In this order of ideas, intelligent contracts are foreseen in the businesses of the future and in the present they are already anchored in:
Purchase of property: The amount of money that must be paid monthly will be established, as well as the number of months and the condition of non-payment. In addition, the title of the property will also be added to the contract. Once the contract is created, there will be no intermediaries or ways to modify it.
Elections: Any type of election (such as a survey) can be registered in smart contracts, so that the winning option would trigger a specific consequence. In addition, the votes would enter the chain of blocks and would be impossible to modify or alter.
Bets: By not having to rely on trust, now bets will be much more secure between two or more individuals. However, a change house could open smart contracts for each game.
Prevention of non-compliance: One of the first common examples of creating an intelligent contract is Digital Rights Management or DRM technologies. This type of contract does not take or process tickets, but simply imposes itself by making it impossible for you to break the contract by acting in an unauthorized manner, for example, copying music or a video file that is protected by copyright.
Property Law: Crypto-currencies such as Bitcoin can be thought of as a set of intelligent contracts that enforce the property law. Cryptographic techniques are used to ensure that only the owner of a digital token such as Bitcoin can spend it. There are already several decentralized asset markets, which expand the range so that many different digital assets can be traded in a single chain of blocks. The same principle can also be extended to physical products with electronic controls or integrated microchips.
Intellectual property: The payment of royalties is sometimes a complicated process, while with smart contracts it is much easier to add the rights of each member.
Financial services: Cryptocurrency obviously opens up a wide range of different use cases for smart contracts that would not otherwise be possible. For example, systems such as the one used by BurstCoin are capable of running auctions that automatically check the highest bidder within a set time limit and reimburse all others, automatically transfer inactive funds or execute a decentralized risk.
This type of intelligent contract only takes numerical values very simple as inputs, performs purely mathematical evaluations and generates a financial transaction through a cryptography protocol.
Credit application: An extension of the property law and a classic example of how smart contracts can be used in the real world, are credit agreements that disable your product if you can not make your payments. For example, you can imagine a future not so far away in which you buy a new car on credit, you can not make refunds, and your car simply locks its doors and drives back to the dealership.
Loans: could be stored as an intelligent contract in the block chain together with the information of property guarantees. If the debtor does not make a payment, the contract could automatically revoke the digital keys that give access to the guarantees.
Escrow: Smart contracts can easily be configured as escrow accounts that track the exchange between two parties. The buyer of goods or services would transfer the payment to the contract account.
The contract would supervise the external services (applications of courier companies) and, once the property of the seller was transferred to the buyer, the contract would automatically release the funds to the seller. This system could be extended to all purchases made over the Internet, for example, since the expenses would be minimal.
Expense controls: Bitcoin portfolios controlled by contracts could include many different types of complex controls, from daily withdrawal limits to the granting or termination of access to specific entities. The generalization of this phenomenon would lead to the notion of programmable money, a type of money that can be established so that it is spent only on certain types of assets, in a geographical area, between two dates, etc. and that it could be used in private companies, public institutions and non-governmental organizations and limit corruption.
Inheritances and donations: Inheritances could be automated by establishing the allocation of assets after death. Once the intelligent contract can verify the activation condition, in this case the death, the contract comes into force and the assets are shared. You could also create contracts with donations to run at a certain time, for example, when your child is of legal age.
In this way, it is envisioned that smart contracts will be part of the greatest diversity of businesses because they can be successfully developed in a large number of decentralized applications, whose cornerstone is Blockchain. Hence, big businessmen and corporations are going to have to understand how Blockchain technologies affect the business, transactional and process environment of their clients, and adapt their services to that environment.
Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and / or services. This press release is for informational purposes information does not constitute investment advice or an offer to invest.