Although the co-founder of Ethereum, Vitalik Buterin, regrets using the term smart contract, it has now become almost synonymous with the distributed computing platform Ethereum.
The popular open source, public, blockchain-based distributed computing platform and operating system that is Ethereum, offers the smart contract functionality that allures thousands of developers and coders. Smart contracts are quickly becoming an essential tool for businesses.
(Read more about Blockchain Smart Contracts.)
The Ethereum Smart Contract offers incredible opportunities for developers. So let’s take a look at some of the best use cases of it:
Banking & Financial Services Contracts
Ethereum smart contracts can really come in handy in the banking and finance sector. Areas such as mortgages, national bonds, payments and settlements, and Insurance claims could really use Ethereum smart contracts to maintain greater transparency.
For example, if a government bond that is on the brink of maturity is written and maintained on a smart contract, then it could automatically disburse the maturity sum to the bearer’s account as soon as it matures. This would make the entire process of tracking and maintaining data extremely convenient.
Digital Identity Management
Identity theft and data monopoly have for long plagued netizens on the internet. Let’s consider applying smart contracts to manage digital identities, how would that solve these problems?
Well, smart contract-based identity management projects like uPort allow for users to have their self-sovereign identity. Their details cannot be copied or seen by someone else unless they authenticate it through the uPort app, maintained on the Ethereum blockchain. So if said person is travelling and has their passport inbuilt in uPort, they can choose to reveal their details at the required checkpoints.
Prediction market is an exciting area for smart contracts to be used in. Platforms on the Ethereum blockchain like Gnosis and Augur have already implemented smart contracts in their system.
The idea is to predict outcomes of important events like who is going to win the election, which team will win the tournament, who will win the reality show etc. The users are encouraged to predict and if their predictions are correct then they are rewarded via trustless smart contracts hosted on Ethereum blockchain. The process is cheap and helps companies gauge public opinions, thereby making it a beneficial tool for market survey.
That time is near when middlemen will be replaced with smart contracts. In terms of escrow services, Ethereum smart contracts could be acting as an Escrow. An example of this is LocalEthereum, which is a p2p Ethereum exchange service.
Smart contracts can also be applied in real estates, wills and inheritance, and in places where there are nominees. Blockchain in Real Estate could actually make the industry moe efficient.