Blockchain has expounded a few more terms to the world. One of the most searched one of them is “smart contract” which plays a significant role in the working of this technology. Considering the growth and expansion of blockchain in various domains, it is important to know about this particular segment. According to a survey, 49% of the global crypto transactions take place with the help of smart contracts.
Fintech solutions have always tried to make transactions and information related to it safer. That quest leads to inclusion of cryptocurrency and smart contract. However, there is a lot of cloudiness in terms of usage of this technology. We will try to spill the beans on this recondite technology and make it more apprehensible for you.
Table of Contents
What is a smart contract?
A smart contract is nothing is but a digital contract which consists of codes in order to regulate the transactions and make them certain forever. It is a protocol which decides what needs to be done under particular circumstance. Since it is a digital version of a contract, it is developed in a way that it functions automatically if all the conditions are fulfilled. On the occasion of dissent with any condition, the contract gets revoked automatically. It is a highly meticulous possession that consists of all the parties to make sure there are no losses.
Blockchain is the base of smart contract which renders the information or codes fully accessible to every member on blockchain. Ethereum blockchain is highly used making smart contracts these days. Solidity language is used to create smart contract, this language is analogous to JavaScript in terms of syntax.
The biggest advantage of using a smart contract is that it totally precludes third party involvement. As a matter of fact, smart contracts ensure that each party executes its own part of contract.
Different smart contracts come with their different complexities. As smart contracts are implemented into various operations, their framework is altered. Some examples of complex smart contract is insurance and crowdfunding. This particular instrument has a great potential and can even replace some of the functions that are currently executed by notaries or lawyers. Therefore, it provides high functionality to various industries.
Things to take care while developing smart contract
If you’re thinking of employing smart contracts in your business, then there are a few things you need to consider.
Is it really needed for your business?
Smart contract works with blockchain and it typically used to execute the crypto transactions. So the first thing you need to is whether cryptocurrency works for you or not? If your business is already running on blockchain platform then it surely is for you. However, if your business doesn’t deal with blockchain or cryptocurrency in any way, then you do not need it right now. As blockchain is getting into every domain, you will surely get to try this technology some day in future.
Analyze the limitations first
If you think that your business is going to have a blockchain soon, then you should now dig into the details of this technology. Above all the functionalities, the limitations of smart contract have to be reviewed thoroughly before implementing it. The idea of smart contract came into existence back in 1994, but it is still needs to be explored.
- This contract can only be applied to something which completely runs digitally. Consider the fact that blockchain is not yet legally regulated and it is decentralized. Moreover, it can only be applied to the internal operations, if you involve any outside investors, smart contract won’t them.
- Smart contracts work with a fact-based environment. Only the objective facts are considered by them, not views or personal judgments.
- Their execution is happened on the basis of records. Therefore, it doesn’t give much space for modifications.
Plan
As you are aware of the limitations of smart contracts, you can now plan it according to your business. You must ascertain first, what you need the smart contract for. You can use it for various purposes such as verifying transactions or payment transfer services. You can also use it with a cryptocurrency exchange. In order to do that, you need to first research the market to find the gainful prospects and get into its development.
Find an expert developer
A rule of thumb for sure, you need to find a developer who can trust and who can a build a robust system for smart contracts. Building a smart contract is not the same thing like building a blockchain. However, a smart contract developer has to have some knowledge of blockchain development as well.
It is better to set a criterion for finding a developer who knows everything about blockchain and its by-products. It may take a little time and efforts to find a suitable smart contract developer as they are currently scarce in number.
Testing
A recent research revealed that there are 34,200 smart contracts which are vulnerable to any type of black-hat attack. So, it is advisable to test your smart contract before you deploy it. A thorough testing of smart contract will tell you if there is any loophole that needs to be fixed. A single glitch can lead to significant loss or discrepancies such theft of information or customers’ money. You may consider audits and QA tests which is a great help to make sure smart contracts work the way they’re supposed to.
Upshot
The level of security and convenience that smart contracts provide is unmatched at all levels. And that’s why smart contract development is rising day by day. It is essential to choose the development team carefully and testing smart contracts thoroughly under the inspection experienced blockchain QA specialist. It is important to keep yourself updated with technology latest happenings so you know when you need this technology for you business.
Technoloader is a blockchain development company which provides all sorts of services related to blockchain. We have developers who can create smart contracts on Ethereum and other ecosystems. Hire a smart contract developer and never worry about the transparency and efficiency in your business.
