Smart Contracts Help Businesses Operate More Efficiently
Smart contracts offer a wide range of potential applications for businesses. These self-executing contracts include the terms of the agreement between buyer and seller directly written into lines of code. They can help improve efficiency and reduce costs.
Ways to Use Smart Contracts
Know Your Customer
One application for smart contracts is to automate the process of onboarding new members to a blockchain network. This is done by creating a smart contract requiring new members to submit “know your customer” (KYC) information before accessing the network. This information ensures legitimate businesses can join the network and helps protect member’s data.
Businesses utilize smart contracts to create digital agreements between two parties, replacing traditional paper contracts, which can be lost or damaged. Digital contracts have the added benefit of being impossible to forge, as users store data on the blockchain. This makes them ideal for situations where a high level of security is needed, such as in the legal or financial industries.
Another application for smart contracts is to create tokenized loyalty programs. This involves creating a digital token that customers can earn for engaging with a company’s products or services. Customers redeem tokens for rewards, such as discounts or free products. Tokenized loyalty programs have the potential to increase customer retention and brand loyalty.
In the future, we will see even more businesses using smart contracts as they become more widely understood and adopted.
Read about how Shell Oil is utilizing blockchain technology.